Preamble

The House met at half-past Nine o'clock

PRAYERS

[MADAM SPEAKER in the Chair]

Health Inequality

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Jamieson.]

Ms Joan Walley: I am grateful for this Adjournment debate because never has it been more important for the House to debate inequalities in health. After 18 long years when the divide between those in good health and those in bad health got worse than ever, for the first time we now have positive action from the new Labour Government and a commitment from the Minister for Public Health, my hon. Friend the Member for Dulwich and West Norwood (Ms Jowell), whom I am pleased to see in her place this morning, to do something about health inequality.
I have spent 11 years representing North Staffordshire, so it is not surprising that, along with my colleagues from the area, I want us to address the issue of health inequality. I want the Government's actions to mean something and to make a real difference to my constituents' lives. That is why I asked for this debate.
It is also fitting that, 150 years after the first public health Act and 50 years after the birth of the national health service, we now have a public health Green Paper, "Our Healthier Nation". We have until 30 April 1998 to submit our comments, so we need a countrywide debate on public health. That would be a first step towards improving the nation's health, and I hope that this morning's debate will stimulate that debate.
I want people in both the urban and rural areas of my constituency to discuss public health, and I want the debate to take place at local level: at work; in schools; in youth clubs; in voluntary organisations—I have received many representations from voluntary organisations about the importance of this morning's debate; in the community; in councils and in parish councils in rural areas; in sports halls, churches, halls, clubs, pubs and working men's clubs; in doctors' surgeries and clinics while people wait for treatment; and wherever people get together.
I welcome the four main categories set out in the Green Paper: heart disease and strokes; accidents; cancer; and mental health. It is important to debate the targets for those categories. I spent many years as president of the West Midlands Home Safety Council, which, along with many other organisations, such as the Royal Society for the Prevention of Accidents, has long pressed for more to be done by local authorities to prevent accidents in the home. Obviously, more also needs to be done to prevent road traffic accidents, and accidents and disease at work.
I welcome the targets to reduce heart disease and strokes by a third, cancer deaths by a fifth and suicides by a sixth. I doubt whether anyone would challenge or question those laudable objectives and I hope that they will be discussed at length as the debate about public health takes place throughout the country.
I am concerned that, while the Government get on with changing the structure and framework of the NHS through the new NHS White Paper, I do not want them to lose sight of the important, all-embracing, over-arching concept of sustainable development, which recognises that the principles behind public health are part and parcel of all aspects of public policy. I welcome the White Paper, as it lays the foundation for beginning the process of modernisation and especially accountability, so that we can deliver uniformly high standards of health care. It consults, and puts a clinical focus on the four main targets.
This is a challenge for us all, and we must support our Minister for Public Health, no matter which side of the House we are on. We must help her in her co-ordinating role to ensure that the comprehensive spending reviews that are taking place across all Departments recognise the importance of public health policies. The Advisory Committee on Resource Allocation must tackle real needs, and the new health improvement programmes, which identify and meet local needs, must have the resources to do what is necessary.
I shall mention some of the consultation documents that are being discussed across the country. The Department of the Environment, Transport and the Regions has produced a White Paper, "Building Partnerships for Prosperity"; a review of planning guidance and of planning for the communities of the future. The housing conditions survey is important, as housing is crucial to health. A consultation document on contaminated land is due shortly, and a review of water charging is currently out for consultation.
The DETR has also produced a document on opportunities for change and a new strategy for a sustainable future. There are reviews of the crucial matter of national air quality and of regulation strategy, which are being undertaken by the Department of Trade and Industry, and new lottery legislation will bring in many bids across the country. All are integral to the promotion of an enhanced quality of life and improved public health.
The public health Green Paper makes many healthy references to the need for local authorities to work in public health partnerships with NHS trusts. A duty on local government and health trusts to work together to produce local health improvements is proposed. However, we must not fragment public health provision by leaving councils with insufficient means to close the huge health gap between the rich and the poor.
Health inequality is tied up with domestic metering of water and disconnections; energy efficiency in the home; the fact that the worst sewers are often in the oldest parts of urban areas; poverty wages, low-income households and the condition of people's homes; and a lack of sports facilities. Many schools in my constituency lack proper sports facilities: how can people take up healthy, active life styles without them?
Health inequality is also tied up with poor diet; unsound agricultural practices, such as the use of untreated abattoir waste as fertiliser for crops and the risk of that getting into the food chain; polluted air; stress; and low educational


achievement—we know all about that in North Staffordshire. Unemployment also has an effect, and, in parts of my constituency, people are on a four-day working week. We must also urgently address the failing child support system.
I speak as the vice-president of the Institute of Environmental Health Officers. Environmental health officers often do not get the recognition that they deserve: they come a poor third in health authority partnerships. Indeed, a MORI survey for the Anchor Housing Trust showed that only 56 per cent. of health authorities consulted environmental health departments when putting together plans for 1998–99.
Just as Edwin Chadwick—an engineer, not a doctor—inspired medical officers of health and developments in public health, we must, as the millennium approaches, recognise the importance of public health to all areas of policy if we are to reduce ill health and health inequality. Ordinary people, just as much as doctors and clinicians, can contribute to improving public health.
That over-arching framework is as relevant to Europe as to the United Kingdom. I urge the Minister to press urgently for wider European Union public health competence through an extension of article 129 of the treaty of Rome when she chairs the European Union Health Council. The Institute of Environmental Health Officers would welcome the opportunity to work with the Government to achieve that.
The truth is that the previous Government failed to recognise the effects of their blatant cumulative under-resourcing of local authorities through the standard spending assessment formula and the abandonment of the resource allocation working party, which did much to redress the balance. Those of us who have been around for a while know that RAWP attempted to iron out the health inequalities that left people in many parts of the country suffering appalling ill health. Such people lived in rundown inner-city areas which traditionally depended on heavy manufacturing industry, but there were pockets of deprivation in rural areas, too.
Ill health reduces daily living to a remorseless and painful struggle for survival. Month by month, our national health services are merely firefighting. Hospital waiting lists are unacceptably long; efficiency savings to pay for treatments have to be made despite our injection of extra money; and litigation costs have to be paid because underfunding has meant that services cannot be provided.
We could start to improve the service if we were able to prevent ill health. The Green Paper will help, but the reality, at least for many of my constituents, is a world apart. That brings me to the second part of my speech—why I want the House to discuss these issues.
Health, good or ill, depends largely on where people live and on their circumstances. I do not think that it should. We in North Staffordshire consider ourselves fortunate. We are a proud community, and we look after one another as best we can. The performance of the Staffordshire ambulance service trust is such that an ambulance arrives at life-threatening emergencies after an average wait of six minutes 11 seconds. The average in all other cases is seven minutes nine seconds. That performance is not bettered anywhere in the United Kingdom; I doubt whether it is bettered in Europe.
In this financial year, the Staffordshire ambulance service trust has responded to 90.28 per cent. of life-threatening emergencies in eight minutes, 97 per cent. in 14 minutes, and 99.36 per cent. in 19 minutes. That is excellent, but there the good news ends. The bad news is that, in an area of 1,000 square miles, the trust had responded to 48,285 emergencies by 20 February this year.
We must learn the lessons of best practice from the trust, and recognise its experience and the improvements that it has made. That must be fed into the review. But the downside is the high death rate from chronic heart disease, which must be treated in the short term, and prevented in the long term.
In my constituency from 1981–92, the odds of people dying before their 65th birthday were 25 per cent. higher than the British average for someone of their age and sex. Furthermore, those odds were more than 75 per cent. higher than in Esher and Walton and in South Cambridgeshire, the constituencies with the lowest rates of premature mortality.
Hon. Members know that people can use statistics to show whatever they want. Whatever figures I consult, however, I receive the message that North Staffordshire, and Stoke-on-Trent in particular, rank highly in terms of relative deprivation. The public health common data set figures show that, in regard to most causes, Stoke has a standard mortality rate of more than 100. In the case of heart disease in men, the rate is 123, 23 per cent. above the average. That makes us 30th out of the 358 local authorities in England. In terms of accidents among women, we rank 23rd.
As for premature and infant mortality, in 1996 there were 5,597 perinatal deaths in England and Wales; there were 689 in the west midlands, and 57 in North Staffordshire. Since 1983, our rate has been consistently higher than the average, and consistently higher than the west midlands rate and the west midlands rate trend, never falling below 10 per 1,000.
Contributory factors include poor nutrition, social deprivation, teenage pregnancy—there is a high risk of teenage pregnancy in North Staffordshire—smoking and drinking alcohol during pregnancy, and inadequate standards of obstetric and paediatric care. Such inadequate standards have been identified as causes of some deaths in confidential inquiries throughout the United Kingdom, and North Staffordshire is clearly no exception.
It is not just infants who start off with reduced life expectancy. The Association of Retired Persons over 50 campaigns for the rights of older people. I am sure that many of us who are present today, if we have not quite reached 50, are not all that far from it.
The North Staffordshire pensioners convention and North Staffordshire Healthwatch campaign for improved services for older people, believing that discrimination on the basis of age rather than need leads to the delivery of inappropriate treatment and, in some instances, the complete absence of effective care. They are worried about the widening gulf between the treatment of older people and the treatment of those under retirement age. I do not want that to happen in my constituency.
Screening for breast cancer in women over 60 is a matter of special concern. I know that the House has discussed the issue before, but I want to flag it up briefly today. There is also a lack of adequate preventive


treatment for osteoporosis and prostate cancer. I am especially concerned about health issues affecting women, because I think that women's health care is very important.
In North Staffordshire, we have a particular problem. It is no accident that we have a relatively high number of long-stay continuing-care beds. In our area, older people cannot necessarily afford private health care. Despite an extensive campaign to keep our NHS long-stay beds, 37 beds are mothballed at Stanfield hospital, and so far no progress has been made on a proposed private finance initiative bid for reprovision of beds at Westcliffe hospital, although it has already been formally agreed through consultation.
There is a good deal of fear and anxiety, because the legacy of underfunding—not just of the health service, but of social services—has left us short of resources for community care. I feel that I have a debt of honour to my elderly constituents. We must plan for the long term and the short term, and also plan transitional arrangements.
I have been inundated with briefings from a number of organisations that want to hammer home to the House just how unfair the system is to those who happen to live where services are insufficient, and whose particular illnesses are not given the priority allocated to them in other parts of the country. We have had another campaign in Stoke-on-Trent to prevent the proposed closure of the fertility unit by the health authority. Although we have had a minor victory, in that the unit has been reprovided, it has been reprovided in a private clinic. There is not enough money from the national health service to pay for treatment there. Those living elsewhere have access to fertility treatment, but there is a definite ceiling on the amount of money available in North Staffordshire.
Dental care is another problem. It is barely possible to gain access to a dentist at present. We currently have applications for extra bids to help the provision of dental care on the NHS in North Staffordshire. Our children have the worst dental health care record in the west midlands—hence our bid.
There are many indicators relating to coronary heart disease, strokes, lung cancer, schizophrenia and suicide. In every instance, the North Staffordshire rates are worse than the west midlands rates, and worse than the rates in England and Wales. I hope that the Minister will have a chance to examine the figures.
There are even worse figures. The extent of ill health in North Staffordshire is illustrated by data showing an increased use of health services in Stoke-on-Trent and North Staffordshire. In 1996–97, there were 170,230 finished consultant episodes at the two NHS trusts in North Staffordshire. That represents about 360 per 1,000 of population, compared with 230 for England as a whole.
The problems that my constituents face daily are illustrated by the fact that the average GP list size in North Staffordshire was 2,077, higher than the England average of 1,881. That average was the highest in the west midlands, and the ninth highest in England, as of 1 April 1997, according to statistics from the NHS executive.
Yesterday, I received a telephone call from a constituent aged 74, who had hardly ever had any NHS treatment. He, his wife and his son—who has had a stroke—have all been struck off by their GP, who does not have to give a reason. We have a shortage of GPs.
Not enough trained GPs are being provided, and, in an area without a medical school, we cannot train the people we need.
I do not like painting a black picture, and I do not intend to do so this morning. We all live with the position daily in North Staffordshire, and we know how urgent is the need to deal with it. Some 10 years ago, the city council published a report called "Health of the City", which remains a blueprint for action, and confirms what I know from my surgeries.
It is clear that there are pockets of extreme ill health and deprivation in North Staffordshire's health authority area that urgently need to be tackled. The key indicators of risk of poor health in certain wards have led to their being designated health action areas. We are making progress, and doing a great deal to offset the problems. The designation of health action areas is a result of joint action that Stoke-on-Trent city council and Staffordshire Moorlands district council have already taken with the health authority. In those health action areas, the Jarman score is unacceptably high, but it is clear that we are making progress.
The problem is that many people cannot wait to be treated, no matter how much we are doing to put in extra money. Many cannot easily see doctors or dentists, and many must wait too long for social work support. Many cannot easily reach clinics. I am currently doing my best to stop the closure of a clinic in Fegg Hayes. We are hoping for a joint initiative to retain clinics in areas where they are needed, to provide family planning and other services.
It is obvious that there are not enough services to meet the needs of people in North Staffordshire. That may lead the House to conclude that our trusts, councils and voluntary organisations are not doing their best, but nothing could be further from the truth: they are doing the best that they can in very difficult circumstances. I want the Minister to know that. They are working in partnership to reduce health inequality in North Staffordshire, especially in those pockets of deprivation where health is worst.
The Green Paper sets out targets relating to specific illnesses, and calls for local initiatives jointly to tackle specific local problems.
We have already started that joint work in our health action areas, but we could do much more. There is a new unitary local authority in Stoke-on-Trent, and it could also do much more. As a result of wanting to do more, it has submitted a proposal for a health action zone. I want that bid to succeed, because it shows that we have the will and the vision and that there is local co-operation to address our specific problems.
I understood that need would play a large part in determining the areas that would succeed in being designated as health action zones. We in North Staffordshire are convinced that our bid is based on need, and we want it to succeed. We are concerned that the panel that is advising Ministers seems already to have excluded our bid. Only three of the six bids from our region are being forwarded with a regional office recommendation for consideration. There will be a decision at the end of March, and I fear that North Staffordshire will not be chosen, because our bid has not been forwarded. I urge the Minister to look in detail at our needs and our bid. We should be pleased to co-operate if she wishes to arrange a meeting.
I am unaware of the criteria under which bids have been reviewed by the NHS executive, because that information has not been made public. In the spirit of openness and accountability, I urge the Minister to consider carefully how she can assist us. If our bid has demonstrated the need for a health action zone but falls down in its detail, I ask the Minister to show some flexibility and offer us advice so that we can redraft our proposals and intensify our present action to address health inequality.
By asking for this debate, I could be accused of building false optimism and unreasonable short-term expectations. The Government warned us against that on page 82 of the Green Paper. North Staffordshire people are realistic and understand that they need long-term, sustained and co-ordinated effort. We realise that there are no quick fixes, but we want an understanding of how much there is to do, and a Government commitment to support us in our efforts.

Mr. Jonathan Sayeed: I congratulate the hon. Member for Stoke-on-Trent, North (Ms Walley) on securing a debate on a thoroughly important topic that affects the lives of many people. The publication of the White Paper on the national health service and the Green Paper on public health, both of which build on the considerable achievements of the previous Administration, means that the debate is timely.
The hon. Lady spoke about a range of inequalities in health care. I hope that she will understand when I say that I shall speak on only one—cancer care provision in the United Kingdom. Cancer remains our greatest medical problem. One in three people suffer from some form of cancer; one in four will die of it, and demographic changes mean that, by 2020, one person in two will get some form of cancer.
It is essential for the Government to support the previous Government's recognition that cancer is one of the main challenges facing our health service. The previous Government commissioned a report on a strategic plan for cancer services. It was published in 1995 and became known as the Calman-Hine report. It is one of the best reports that I have read in the past 20 years. It was practical and focused, and it has already led to considerable achievements in the provision of cancer care. However, there is still much to do.
The aim of the Calman-Hine report was to ensure that all patients
received a consistently high level of service regardless of where they lived.
It highlighted
variations in recorded outcomes of treatment
and advocated that
all patients should have access to a uniformly high quality of care in the community or hospital".
Much work was carried out under the previous Administration to make that strategic plan a reality, but much remains to be done. I urge the Government to take the opportunity that is presented by the Green Paper on public health to make fair and equal access to specialist, high-quality cancer care their priority.
Perhaps I may be allowed a short commercial. For some years, I have worked with the Cancer Macmillan Fund, which is a superbly run charity. It does not waste money, but does what it is meant to do, which is to help people. It does that in a number of ways, one of which is by working with the NHS and with Government. It does not spend its time complaining but gets on with the job. My commercial is that those who are thinking of giving money to charity should put the Cancer Macmillan Fund on their list.
That charity has made it clear to me that there are significant variations in the availability and quality of services—the so-called cancer lottery. I congratulate the charity on its work with the NHS, which has benefited many patients. Much of its pump-priming work will be known to the House. It is the only charity that works with the NHS and others to provide cancer patients with expert nursing and medical care. It also provides a service that is often lacking in the NHS because it offers emotional and practical support from the point of diagnosis onwards, so that patients and their families may continue with productive working lives.
There are many examples of health care inequalities in tackling cancer, but I shall give just a few, because I know that other hon. Members wish to speak. Fewer than 50 per cent. of cancer patients are referred to a specialist for treatment, and only a fraction have access to clinical nurse specialists such as Macmillan. There is considerable evidence that some black and ethnic groups and older people are less well served than other members of the community. For instance, there is a low uptake among the Asian population for screening and palliative care, and there is a chronic shortage of information in languages other than English.
People in rural areas also have limited access to specialist services. I have not even touched on the widely differing arrangements for different types of cancer. For example, lung cancer patients often receive what is coyly called sub-optimal treatment whereas breast cancer patients rightly have a fast-track diagnosis.
One fundamental element links all those issues, and it is the lack of appropriate patient information on the types of services that are available, on the nature and course of the disease and, most importantly, what patients have the right to expect from those who are caring for them. Such information is not expensive to produce, but it is critical if we are to deal with what is already a scourge and will get even worse. Patients can demand better services only if they have access to the most basic information on their condition. Too often, that information is lacking.
The Government have made some welcome commitments in their recent White Paper and Green Paper, which I hope will end those forms of health inequality. However, fine words have to be supported by action and backed by resources. There is—to give one specific example—a considerable shortage of clinical and medical cancer specialists. The Government have given a pledge: to ensure that everyone with suspected cancer will be referred to a specialist within two weeks of their general practitioner recommending that course. That will be achieved only if action is taken now to recruit and train new postholders—otherwise, it will not happen.
I urge Ministers to seize this opportunity to work with the national health service and with voluntary organisations, such as Macmillan, to make Calman-Hine—one of the best reports of the past 20 years—a working reality.

Mr. Gareth R. Thomas: I congratulate my hon. Friend the Member for Stoke-on-Trent, North (Ms Walley) on introducing this debate on health inequalities—an issue that Ministers in the previous Government completely failed to address properly. One of the most disappointing features of the debate following the Green Paper's launch by my right hon. Friend the Secretary of State for Health was the continuing inability of Opposition Front Benchers to recognise the clear links between ill health and poverty, ill health and unemployment, and ill health and poor housing.
The London Research Centre—one of many research bodies working in the subject—has published many excellent reports, which have consistently highlighted the link between ill health and deprivation. Mortality rates in London are consistently worse in areas of deprivation. In the most deprived inner-London boroughs, mortality rates are up to twice as high as in some outer-London boroughs.
Therefore, one of the most positive aspects of the recent Green Paper on public health is the Government's commitment to improving health for the worst-off in our society and to narrowing the obvious health gap. Other positive features of the Green Paper are explicit recognition of the link between childhood injuries and social deprivation; of higher mortality rates for coronary heart disease and cancer among men of working age in the bottom social classes; and of rising incidence of poor mental health, particularly among the socially disadvantaged.
It is frustrating that it has taken so long for Government health policy to address health inequalities. As far back as 1980, the Black report concluded:
much of the evidence on social inequalities in health can be adequately understood in terms of specific features of the socio-economic environment.
We should not have had to wait until 1998 before the Black report's conclusions were listened to and acted upon.
The failure to acknowledge and address the socio-economic factors affecting health was the most serious omission of the 1992 document "The Health of the Nation". The document's only reference to those socio-economic factors was made in section F of the appendix, which mentioned
variations in health status between different socio-economic groups".
Sadly, it went on to conclude:
the reasons for these variations are by no means fully understood".
In cold light, such apparently wilful ignorance of the causes of health inequality is astounding. I do not believe that those who drafted "The Health of the Nation" simply did not know or understand the causes of health inequality. The previous Administration—who were responsible for great increases in poverty and inequality—simply did not dare to admit that growth in the numbers of those on low incomes might have wider social

consequences. They chose instead to focus almost entirely on individuals' own behaviour, failing completely to own up to the consequences for the nation's health of economic policies that generated increasing poverty, poorer-quality housing and higher unemployment levels.
As the Green Paper clearly states, poverty and unemployment can result in problems in keeping the home warm, may inhibit healthier life styles and increase the likelihood of accidents. The Government's welfare-to-work programme to tackle unemployment by offering a new deal to young people, the long-term unemployed and lone parents will be crucial—with the introduction of a national minimum wage—in beginning to tackle immediately those two key causes of inequality: low incomes and lack of employment opportunities.
Establishment of the Prime Minister's social exclusion unit—focusing on the needs of those on low incomes, who face a combination of social problems—will generate welcome longer-term initiatives to tackle health inequalities.
In my constituency, my local authority is due to receive next year about £2.3 million under the capital receipts initiative—part of a national programme that will, over the next two years, provide almost £800 million to enable a much more ambitious programme of repairs and improvements to our housing stock than would have been possible had the previous Administration's plans been continued. The measures will help tenants in social housing—who are usually the least well-off and most vulnerable to ill health—to be able to live in healthier domestic environments, free from the twin spectres of damp and overcrowding that not only damage our lungs and our respiratory system but increase the likelihood of accidents, sleeplessness and the spread of infections.
Increased energy efficiency programmes will be deliverable by the Energy Saving Trust now that the threat of a £5.5 million funding cut has been lifted by the Deputy Prime Minister and the Chancellor has cut value added tax on energy saving materials. Those programmes and the resources provided under the capital receipts initiative will be crucial in tackling the health problems of the least well-off that are caused by living in cold homes.
The Government have begun the task of confronting the inequalities in income, housing and job opportunities that are also the causes of major health inequalities. We have to ensure that international, national, regional and local partnerships for health improvement are developed by all key stakeholders. Such partnerships must be sustained and rigorously monitored to ensure that they are appropriately targeted and successful in narrowing—and eventually eliminating—health inequalities.
The success in Europe of my hon. Friend the Minister for Public Health in securing European Union agreement on ending tobacco advertising and sponsorship is one positive example of international action to reduce the greater incidence of smoking in low-income families. If our targets are to be achieved, it is essential also that effective work across Departments—which has already started, as the Green Paper demonstrates—continues.
Focused and co-ordinated policies in delivering long-term reductions in health inequalities will be crucial also at a regional and particularly at a local level. I look forward to a London regional development agency and a Greater London strategic authority focusing on health inequalities across the London region.
Too often, public health has been the cinderella service for health authorities, to the chagrin of many of the staff working in those authorities. Public health has not been singled out for development and has often been the first service to be targeted for service cuts. I welcome the important development of primary care groups, which will rightly shift health authorities' thinking to focus much more on improving health and away from concentrating on episodes of illness.
I look forward to my own Brent and Harrow health authority developing—in tandem with the council, local voluntary groups and other statutory bodies—a health improvement programme to help achieve the Green Paper's national targets and to tackle local priorities. Health action zones are a particularly welcome initiative in the Green Paper to focus investment and to generate impetus in tackling health inequalities in areas of considerable deprivation. The zones must generate long-term and sustainable strategies to confront those health inequalities.
Despite my constituency's relatively wealthy image, it has some significant pockets of poverty and poorer health. Just as Harrow will benefit from the health authority's—I hope successful—bid for a Brent health action zone, so we must ensure that best practice in the health action zones that are established is quickly identified and disseminated to all health authorities.
The most effective initiatives to date in tackling health inequalities have been born out of partnerships between a range of agencies and groups of local people. As my hon. Friend the Member for Stoke-on-Trent, North recognised, new duties on local authorities and NHS bodies to work together to promote well-being in their areas will help to deepen and cement the effective local joint working which is crucial to the success of the Green Paper.
The desire to improve health must also be at the core of regeneration initiatives in our inner-city areas and on rundown estates and part of the Government's wider drive to make urban areas more attractive and healthier neighbourhoods in which to live.
An integrated transport policy—for example, the provision of safe cycling and walking routes—will help to ensure better air quality, improve levels of fitness and lead to fewer accidents in areas of deprivation. In many such areas, banks and shopping facilities have been withdrawn, making access to the cheapest and most nutritious foods difficult. Credit unions, food co-operatives and local exchange trading systems all have a role to play in improving access to a range of services that tackle inequalities.
As regional development agencies work to increase investment, I hope that they will focus specifically on areas of high deprivation and will have a strong public health dimension to their work.
Measures to make sport and physical activity in general more accessible are essential components of a healthy environment, whether at school, in the workplace or in the wider community. Research by the English Sports Council clearly shows the link between unemployment and a sedentary life style. I share the concern of my hon. Friend the Member for Stoke-on-Trent, North about the

lack of decent sports facilities in many areas. In my constituency, a number of key communities are a considerable distance from proper sports facilities, and this problem needs to be tackled.
I congratulate some of our major sporting governing bodies, such as the Rugby Football Union and the English Sports Council, on targeting some of their development work on areas of great deprivation. I hope that the White Paper, when it appears after the consultation period, will encourage increased partnerships between sporting clubs and their communities to tackle health inequalities. The decision to stop the sale of school playing fields is a crucial step in the development of healthier schools, where pupils take regular exercise and are encouraged to participate in sports.
I especially welcome the proposal for a network of healthy living centres, funded by £300 million from the lottery, to complement the drive to focus statutory bodies on the health of their communities. Healthy living centres will be an important boost in tackling health inequalities in areas of deprivation. They will enable local communities to have access to a range of health-related programmes appropriate to local needs in areas where, perhaps, existing health and fitness facilities are either off-putting or, as in my constituency, difficult to get to.
At last we have a Government who are focusing on the key link between inequality of income and inequality of health. The nonsensical idea that poverty and poor health were not related has at last, thank goodness, been discredited and discarded. Using the tools in the Green Paper, I look forward to working with the Government, the new Greater London authority, and, especially, stakeholders in my constituency to tackle health inequalities in Harrow.

Dr. Peter Brand: I congratulate the hon. Member for Stoke-on-Trent, North (Ms Walley) on her wide-ranging and comprehensive introduction to this important debate. She clearly showed that there is inequality in health, and I think that every hon. Member could have made a similar speech, perhaps using different examples.
The problem is that we have no longer a national health service but a fragmented one. What one can expect depends not on one's clinical need but on where one lives—it is a lottery by postcode. We need the Government to declare what they will deliver to users of the health service and what people's core entitlements are. If we cannot deliver a comprehensive entitlement, let us be honest about it. It is wrong to leave it to clinicians to cover up for politicians who are not prepared either to raise the money or to suppress the expectations of the people who rely on the health service.
Mention has been made of the allocation of resources. We can make wonderful speeches about what we are trying to achieve, but without resources we cannot do anything. We need to look again at how resources are allocated. RAWP, the resource allocation working party, went a long way, but it was very insensitive. We must have a system that considers not only patients' profiles—including age, incidence of illness and social and economic deprivation, which are important factors in determining the input of resources to a particular area—but the cost of delivering care.
It is more expensive to deliver comprehensive core services in an isolated area. I know that the Government are examining rurality as one aspect of this problem, but I make a special plea for those who experience a unique aspect of isolation—those who live in island communities in England. Such communities in Scotland are recognised as having a greater need, and I hope that there will be a similar recognition south of the border.
The hon. Member for Stoke-on-Trent, North made a very good case for partnership and the encouragement of partnership. I welcome the health action zones that the Government have introduced as pilot projects. I hope that they will be bold and choose a wide range of pilots. It is sad that they are restricting themselves to 10 to 12, and I hope that they will have a rethink.
We are getting messages telling us that we may or may not be successful in respect of the pilot projects, but I hope that the Government will encourage local enthusiasm where it exists, because enthusiastic people tend to deliver, no matter what the resources. If one thing has kept the NHS going in spite of all our concerns, it is the commitment of the people working in it. It is for the politicians to encourage that commitment, and a wider acceptance of health action zone bids will go some way to fostering that.

Mr. Patrick Nicholls: I too congratulate the hon. Member for Stoke-on-Trent, North (Ms Walley), not only on securing the debate, but on introducing it in the way she did. As is clear even from this debate, we might have different views and different suggestions as to how to tackle the problems, but there is no doubt that there are inequalities in health provision.
The hon. Lady drew on her constituency experience as a starting point, but the figures for her constituency also tell a wider tale. She referred us to the public health common data and the standardised mortality ratios. They show that Stoke is below the national average only in cerebro-vascular disease. That is bad news: I am not saying that Stoke is a terrible place to live, any more than she did, but it clearly concerns her.
However, the picture is mixed, because the same figures show that Stoke is below the national average when it comes to infant mortality rates, with about 5.5 deaths per 1,000 live births compared to 6.1 per 1,000 in England as a whole. That brings us to the "gap" about which we have heard so much today.
In 1995, the age-standardised death rate per 100,000 of the population in Stoke-on-Trent was 860, compared with 1,056 in 1985. Both those figures for Stoke were higher than the averages for England in those years, which were 748 and 894 respectively. Interestingly, if one compares the average rates in 1985–87 with those for 1993–94, one finds that, in percentage terms, the reduction has been greater in Stoke than nationally. One could ask, "Is my glass half full or half empty?" I accept that one could say that there was more room for improvement in Stoke, so the decline would be greater. That is a perfectly fair point, which needs to be made.
If the health gaps between social classes widened in the 1980s, that must be seen in the context of a declining mortality rate for all classes. For men aged

35 to 64, age-standardised death rates fell by 32 per cent. for classes one and two between 1976–81 and 1986–92. The highest fall—44 per cent.—was experienced by socio-economic group three, whereas there was a 21 per cent. fall for groups four and five.
The hon. Member for Stoke-on-Trent, North reminded us that we all use statistics to back our particular cases, but I mention those figures because they show how careful one must be in using the gap as a measure of success or failure. I suspected that the hon. Lady—I hope that she will take this as a compliment—was going to make more of the gap, as the hon. Member for Harrow, West (Mr. Thomas) did, but she was right not to.
The gap is a relevant fact and indicator, but what matters more is the absolute standard of treatment that the poorest and most disadvantaged members of society receive. We could, for example, imagine a situation in which the gap had narrowed even though the absolute position of the poor had worsened. No one would regard that as a measure of success. It is too simplistic to argue—as people often do—that the continuing gap between the rich and poor must mean that the situation is worsening. I compliment the hon. Member for Stoke-on-Trent, North on not overplaying that argument.
In the debate, there has been more than a hint of the great cry,
Four legs good, two legs bad".
It was suggested that everything that happened under the previous Administration was bad, whereas everything that will happen under this Administration will be good, and that the previous Government allocated insufficient resources, whereas things will be much better now. I do not think that the figures substantiate that argument.

Ms Walley: I made it clear that the setting up of the health action areas has made a significant difference. I want us to address the current situation.

Mr. Nicholls: I am sure that the hon. Lady is absolutely right in that, but it is not the case that, when the new Government took office, they found that the previous Government had applied manifestly inadequate resources. I shall not blind the House with statistics, but the previous Government spent some £80,000 every minute on the national health service. One can always cry, "Even more should have been spent," but that was a substantial sum.
The third progress report on the "Health of the Nation" project, which was published in July 1996, showed that progress had been made on 18 of the 21 targets. The death rate from coronary heart disease for those under 65 had fallen by 19.2 per cent. and by 12.5 per cent. for those between 65 and 74. The death rate from breast cancer in women aged 50 to 69 had fallen by 9.6 per cent. The death rate from strokes among those aged between 65 and 74 had fallen by 14.3 per cent., and the death rate from lung cancer among men aged under 75 had fallen by 13.9 per cent.
We are debating this subject against a background of substantial improvement in the nation's health. As the hon. Member for Stoke-on-Trent, North said, we do no good by saying that the position is worse than it is.
Numerous studies have made the connection between poverty and ill health. The hon. Member for Harrow, West seemed to take the view that the wicked old Tories had always said that there was no such link. I am not trying to avoid a good argument—I am always in favour of one if necessary—but the hon. Gentleman is wrong. People sometimes advance the view that the cause of ill health is poverty, and that ill health will disappear at a stroke if poverty is abolished. That is an attractive view, but numerous studies show that it is not so.
The Minister may mention—or we may hear about them in the continuing debate—the various reports that are cited as evidence that poverty causes ill health. Sir Douglas Black's report is the most famous; it is often cited as showing the linkage beyond doubt. However, the Black report said that the argument is much more subtle and complicated. For example, it found that health inequalities related not so much to poverty as to the way in which different parts of the population used health services. It suggested that the lower occupational classes made greater use of general practitioner services, but that their use of preventive health care was markedly lower than that of higher occupational classes. That argument was confirmed in a study by the King's Fund in 1995.
There are other factors that are not directly related to poverty. The Policy Studies Institute report on aspects of health inequality, which received some publicity, argued that the differences between ethnic groups and between ethnic groups and whites could not be explained by the disadvantage that was experienced in the country of birth; those who were born in Britain or migrated at early age were, if anything, likely to have less good health.
The report also emphasised the significant variations within specific ethnic groups, and said that a key factor appeared to be socio-economic status. Nevertheless, it said that it was unlikely that that was the only cause; if it were, it would be hard to explain why ill health in one group was demonstrated through increased risk of hypertension, whereas in another group it manifested itself in heart disease. The report also suggested that biology and culture, with other factors such as the knowledge and experience of racism, might also be relevant.
I make those points not to muddy the waters; I want to clarify the arguments. The link exists, but it is more complicated than has been suggested. People may be poor because they are in ill health, and there are a range of other factors, including environmental and genetic.
We should also consider life styles. We now know that smoking wreaks devastation on the population's health. No one—whether rich, middling or poor—much above the age of 10 does not realise that smoking is harmful.

Mr. Gareth R. Thomas: The example of smoking is particularly apposite. Does the hon. Gentleman recognise that the incidence of smoking is greater among low-income families than among high-income families? Does not that demonstrate the need to tackle inequalities of income as well as the other inequalities to which he has referred?

Mr. Nicholls: The hon. Gentleman is mistaken; one cannot say that poverty drives people to smoke. We have

to accept that, ultimately, people are responsible for their health. Some people use poverty as an excuse and ignore what is in their best interests. One cannot say that people who are poor or on low incomes are entitled to turn away their faces from the damage caused by smoking.
Smoking, whether one has a high, middle or low income, is devastating. I give the Government full credit for the fact that they have made that abundantly clear, and done a great deal to publicise the damage that smoking does. I believe that a forthcoming White Paper will make the same point.
Whatever we may have had to say in the past—it may be relevant to say it again in the future—about the fact that sometimes, even in taking forward a good policy, one can unexpectedly strike an uncertain note, the fact is that the Government have made it clear where they stand on smoking, and that is a jolly good thing.
I want to leave sufficient time for the Minister for Public Health to respond, but first I shall comment on a note that I detected, more in the speech by the hon. Member for Harrow, West than in that by the hon. Member for Stoke-on-Trent, North—perhaps because, like me, the hon. Lady has been in the House long enough for a certain cynicism to sink in—to the effect that, somehow, everything will now be sweetness and light.
I do not necessarily see that. Yes, some things in the Green Paper on public health were worth while, but the targets were cut from more than 20 to four. So far as one can compare them—that is not easy, and it probably was not intended to be—the four targets are less exacting than those in "The Health of the Nation".
The Minister will correct me if she thinks that I have it wrong, but I see nothing in the Green Paper that deals with inequalities in health in particular. Obviously, that is the dimension of the national health service that we are talking about today.
I am not the only one who says that. Let us look at the reception that the left-of-centre press gave the Green Paper. We now have four targets, none of which seems to address health inequalities specifically. That aspect has been criticised by both health groups and journalists.
The Financial Times said:
ministers have dropped plans for targets to cut the health gap between the social classes. Karen Caines, director of the Institute of Health Service Management said: 'on this most crucial issue of health inequality they have bottled out. Without measurable targets, even over a long time-scale, there will be less pressure for change and less scope to hold them to account.'
There was a leader in The Guardian, too. On the whole, Guardian leaders do not give comfort to Conservative spokesmen—[Interruption.] I suspect that that intervention was good enough to put on the record, but I did not hear it.

Mr. David Jamieson: We have not found them helpful, either.

Mr. Nicholls: It is always nice to enable a Whip to record something for posterity. Let me assure the hon. Gentleman that he will not find what I am about to read helpful, either, but he may find it true.
The Guardian leader said:
The Government is wrong to shrink the number of targets from 27 to four … Most serious of all is the absence of targets for reducing health inequalities. Anti poverty campaigners must insist on their inclusion. There must be a specific commitment to close the gap".
There is more from the Health Service Journal in the same vein:
King's Fund chief executive Julia Neuberger said, '… we do have to measure progress in reducing inequalities, otherwise there is a danger that no one will take responsibility and be held to account'".
I could read out more of the same sort of thing.
I must say in passing that the wholesale closure of hospital facilities in London, although the Labour party said a little while before the election that it had no plans—[Interruption.] I shall go through it all if hon. Members want. There is the closure of the accident and emergency department at Guy's and of the Greenwich district general hospital; there is the transfer of facilities from Queen Charlotte's hospital to Hammersmith hospital, and many other similar developments throughout London. It is all about hospital closures and the reduction of facilities in areas of high social deprivation.
It is not only Conservatives who are entitled to raise doubts about the idea that nothing was done under the previous Government and nothing like enough was spent, yet that, under the present Government, everything will be different. The left-wing press is expressing the same doubts.
The argument is not as easy as it may seem. Inequalities in health must be addressed, but as for the idea that simply by a change in Government one can produce a brave new dawn in which complex problems become simple, I do not believe it. But I shall wait and see what the Minister has to say.

The Minister for Public Health (Ms Tessa Jowell): I begin by adding to the congratulations offered to my hon. Friend the Member for Stoke-on-Trent, North (Ms Walley) on prompting the debate and providing an opportunity for one of the best debates on the issue that we have had for some time. We are grateful to my hon. Friend for that, and for the way in which she has raised issues of such direct concern to her constituents.
I shall deal first with some of the general issues arising from the Green Paper on public health and the response to it. It has two broad aims. One is to increase the length of healthy life, and the second is to close the health gap. For the first time in 18 years, there is the recognition that inequalities in health linked to social class have got worse.
For example, if, between 1991 and 1993, all men had had the same death rate as those in social classes I and II, there would have been more than 17,000 fewer deaths each year. Children born today into social class V are five times more likely to be killed in an accident before they are 15 than children born into social class I. The litany of evidence in support of the existence of health inequality goes on.
We should not take a simplistic view of health inequality, but we must start by recognising that it exists. The poorer people are, the more likely they are to be ill. For example, people in social class IV or V are more likely to face every illness—except, I think, melanoma—than people in social class I or II.
The case for the existence of health inequality—the link between poverty and ill health—is clear, but the story is not as simple as that. That is why the Green Paper does not take a simple deterministic view of ill health and poverty, but recognises the important role of confronting poverty as a way of improving health.
We also draw attention to the inequalities between different ethnic groups and between regions. The rate of heart disease is three times lower for men in Oxfordshire than for men in Manchester. We need to take such regional inequalities as seriously as other manifestations of inequality, including inequalities between men and women.
When we talk about tackling health inequality, we are talking about tackling the reasons that divide us as individuals in our enjoyment of good health, and about recognising the many factors that are brought to bear. Some of those are determined early in our lives and others later, and they result in a differential expectation of good health between men and women, and between people from different social classes and ethnic backgrounds. The expectation even varies according to where people live.
The inheritance is complicated, and things were not helped by the previous Government's refusal to recognise the link between poverty and ill health, and to confront the complex nature of inequality. The targets that we have set to meet our two overriding aims of improving healthy life expectancy and tackling the health gap aim to yield two results.
The first is a reduction in avoidable deaths. More than half the people who die under the age of 65 die from cancers or from circulatory disease, including heart disease or stroke. If we are to make an impact in reducing preventable death, we have to concentrate our efforts on those areas which represent the greatest risk.
It is important to recognise the need to establish a proper balance between nationally determined targets and those that measure specific problems in relation to particular local needs. It is not true to say that we have refused to set inequality targets. The better informed commentators—the leader in the British Medical Journal, Professor Julian Le Grande and others—have made that absolutely clear. They have endorsed the Government's approach in reducing the number of targets, and linking targets to a clear strategy for action.
Setting national targets for inequality is a complex and inexact science, which is why the Government have commissioned Sir Donald Acheson to review the evidence relating to inequality and to provide guidance on the areas of Government policy where action to reduce health inequality which impacts on other aspects of policy is likely to be most productive. In that respect, as in all other aspects of our health policy, we are pursuing a common approach, which is to apply what works, based on the best available evidence. Through consultation, and in the light of Sir Donald's conclusions, we shall reach a judgment as to whether or not to set national inequality targets; but we shall urge local health authorities to set inequality targets in the context of health improvement programmes.
We are determined to deliver a strategy, and it is one of the toughest challenges facing the Government. As my hon. Friends the Members for Harrow, West (Mr. Thomas) and for Stoke-on-Trent, North made abundantly clear, delivering improvements in health, especially to the poorest, will rely on successful


Government policy across a range of issues, including getting people off benefit and into work, improving educational standards and tackling environmental problems such as air pollution and congestion. Those are all vital ways of improving health and reducing avoidable death, as well as being policies for economic renewal and regeneration.
Cross-Government working and partnerships at local level will also be key, but we need to recognise that success in delivering the strategy will rely on effort in three broad areas. First, the Government must take the action that only the Government can take. Secondly, through health action zones, the single regeneration budget, education action zones and the range of regeneration initiatives and health improvement programmes, we must ensure a local fit to local circumstances when addressing local priorities.
Thirdly, we must all recognise that we bear a responsibility to ourselves and to our families for improving and safeguarding our health. Only if we secure properly balanced action in those three areas—Government action, local intervention and action and personal responsibility—will we begin to see progress in those areas where progress has been elusive thus far. That is the essential national contract for better health which sits at the heart of the Government's approach.
I shall now deal quickly with some of the important points made by my hon. Friend the Member for Stoke-on-Trent, North. With other hon. Members, she pointed out the extent of inequality whereby areas of poverty and poorer health can exist alongside areas of relative affluence. Her own constituency clearly illustrates that point.
The national average mortality from heart disease is 42 per 100,000 people, whereas it is 53 per 100,000 in North Staffordshire, and that picture is repeated when we look at other causes of premature death: death rates from stroke are worse than average, as are those from lung cancer; infant mortality is worse; and schizophrenia and suicide are more common. Those are only averages, which conceal pockets of deprivation and poor health in wards that suffer problems equal to the worst in the country.
I should also underline the evidence of great enthusiasm and resilience shown by voluntary organisations, the local authority and the local health authority in the face of that deprivation in my hon. Friend's constituency. I have read with great interest their recent bid for health action zone status and of their bid to the single regeneration budget, and their work with the World Health Organisation on the healthy cities initiative. All those initiatives, to which so much effort has been devoted, show that there is real spark and a commitment to get to grips with the problems facing her constituents.
I am sure that my hon. Friend will forgive me if, having given her every assurance about the careful consideration being given to the health action zone bids from her constituency and that of my hon. Friend the Member for Harrow, West, I do not make any announcements today about successful applicants. However, whether or not their bids are successful, all the 41 authorities that have bid for health action zone

status should use the effort and partnerships developed for the bid as the foundation for continued progress in tackling health inequality.
I reiterate the concerns expressed by my hon. Friend the Member for Stoke-on-Trent, North about fertility services in North Staffordshire. I note that the health authority has been taking positive action to compare its expenditure on fertility services with that of other health authorities.
Although I am conscious that all health authorities need to balance local spending with local need, I would encourage my hon. Friend's local health authority to ensure that provision is in keeping with the level of service available elsewhere in the country. In passing, I pay tribute to the Staffordshire ambulance service: it is a beacon to other services, and another example of successful local endeavour.
Let me now deal with some of the other aspects of the broader relationship between the Government's approach to public health and the regeneration of the national health service. The Government view the White Paper "The new NHS: Modern—Dependable" and the Green Paper "Our Healthier Nation" as components in the plan to improve the health of the people of this country.
Let me restate the guiding framework, which was set out in our election manifesto and repeated in the NHS White Paper and within which treatment—whether for cancer or for any other condition—will be delivered to the people of this country:
If you are ill or injured there will be a national health service there to help; and access to it will be based on need and need alone—not on your ability to pay, or on who your GP happens to be, or on where you live.
We are deeply concerned about inequalities in access to treatment, which is why the fair access dimension is one of the key performance measures for the new NHS. We are also concerned that areas whose residents are in greatest need of health care may not be getting their fair share of health care resources. We are determined to make every possible effort to ensure fairness in access and in treatment.

Mr. Sayeed: Will the Minister give way?

Ms Jowell: I hope that the hon. Gentleman will forgive me if I do not. We have almost run out of time, so I shall not take his intervention, other than to say that I accept his analysis that the cancer care framework set out in the Calman-Hine report provides a model for the development and delivery of health care services in other areas. The Government have made it clear through the development of service frameworks that we intend to build on that approach to provide an integration of prevention, health promotion, community care, primary care and acute care, available where it is needed and on the basis of need alone.
Let me finish by recalling the words of William Farr, the first Registrar-General, who said 150 years ago:
Good health is as dear to the rich as it is to the poor.
We are determined to remove the many obstacles which stand in the way of the poor enjoying the good health to which they are entitled.

Strategic Defence Review

11 am

Mr. Keith Simpson: Mr. Deputy Speaker, I thank you and the House for the opportunity to have an Adjournment debate on this important subject. I applied for an Adjournment debate on the strategic defence review before Christmas, as I thought it unlikely that we would have an opportunity to have a major debate on it before it was published some time in the spring or summer. It is coincidental that the debate has been selected this week, against the background of the Iraq crisis. There is no conspiracy in the Speaker's Office; this also happens to be the week in which the Defence Committee visits Washington, but this is not a method by which we can debate defence in the absence of the distinguished members of the Select Committee.
This is an opportunity for hon. Members to question the Minister about the strategic defence review and for him to provide an interim report on where we are. There is a rumour that the Secretary of State for Defence, apart from official appearances in the House, is now in purdah and will no longer accept outside speaking engagements for fear of lifting the veil on the strategic defence review.
We last debated defence in the two-day defence debate in October. Since then, we have had a good Adjournment debate in November, introduced by the hon. Member for Chorley (Mr. Hoyle), on the defence industry. I compliment the hon. Gentleman on his assiduity and his great interest in defence. In December, we had an Adjournment debate, introduced by my right hon. and gallant Friend the Member for Haltemprice and Howden (Mr. Davis), on the important subject—given the Iraq crisis—of anti-missile defence.
It is usual at this time of the year, as more experienced hon. Members know, to have single-service defence debates. Perhaps at the end of the debate the Minister will confirm whether the Ministry of Defence intends to go ahead with the single-service debates, or whether we will have a further hiatus.
The strategic defence review is as much about continuity as change. One thing we should establish this morning is how much is continuity and how much is change and what that change means for the United Kingdom and for defence. I do not have to tell the House that defence is still important. I would like to believe that there is a consensus among the majority of hon. Members that the defence of the United Kingdom, our people and our interests is of paramount importance and cannot be taken lightly. It cannot be cut back, nor can the capability be given up lightly as we may be forced to readopt it in the event of a major crisis. Ultimately, the defence capability of our country is a war-fighting capability. The defence of our country gives us the political leverage that is important in the new world disorder in which we live.
The defence budget, of nearly £22 billion, is by no means the largest in Whitehall; it comes well below social services, health and education. I do not need to remind the House that the MOD has 210,000 regular service personnel and employs 109,000 civilians. It is UK industry's largest customer—11,000 UK companies have a defence interest. Defence affects virtually every Member of the UK Parliament. Some 10 per cent. of all UK industrial employment and 11 per cent. of all

industrial output is connected with defence. Defence exports are probably worth in excess of £4 billion a year. It is a major earner for UK plc.
During the Prime Minister's statement to the House yesterday on the Iraq crisis, my right hon. Friend the Leader of the Opposition asked whether the Prime Minister agreed that the
strategic defence review, which is now approaching completion, could not reasonably conclude that there is scope for reducing the defence budget?
The Prime Minister replied:
I have always thought and said that this country's defence forces are vital to our foreign policy and Britain's standing in the world. That is precisely why the strategic defence review will ensure that our armed forces have a secure and certain future."—[Official Report, 24 February 1998; Vol. 307, c. 177.]
On that, we would all agree, and that is the litmus test for the review. I sincerely hope that those words of the Prime Minister will not come back to haunt him in six months' time.
I want to take the Government at their word. They claim, not only on defence but across the board, that they are into greater openness and public accountability. The Government have continued, and indeed expanded, the policy of previous Conservative Secretaries of State by providing more information about defence. It is exceptionally good that the wide range of expertise in our universities and establishments of higher education on defence and security matters has been consulted. The defence industries have been brought in, as have non-governmental organisations, which have much to offer. The public have also been consulted. We can all agree on that and the Government have undertaken a major programme.
That is the easy bit. The hard bit is making decisions. How do we assess the progress of the Government's strategic defence review? How do we judge the strategic defence review when it is published? I suggest five tests. First, does it provide effective security and defence for the United Kingdom? Secondly, does it succeed in meeting the United Kingdom's national and international obligations? Thirdly, will our armed forces be organised, manned and equipped to meet those obligations? Fourthly, has the strategic defence review taken into account the twin revolutions in political and military affairs? Finally, will the financial resources be allocated to meet this remit? That final point is the crunch in terms of the strategic defence review.
There are two ironies connected with the Iraq crisis. One is a question of national identity, the other a question of defence direction and capability. Certain elements of the new Labour Government—the Minister does not fall into this category—have been keen to rebrand Britain as cool Britannia, whatever that means, yet there is a certain irony that the reality of sending a task force to the Gulf in the Iraq crisis has been more traditional and—without jingoism—more rule Britannia than cool Britannia.
Secondly, despite all the Government's allegations of how weak the defence capability was after 18 years of Conservative government, the reality is that the command and control system set up as a consequence of the experience of the Falklands and the Gulf war—the Cabinet, the MOD and the permanent joint headquarters—was established by the Conservatives. The remit to send a task force was established and tested by the Conservative Government, as were the doctrine, weapons, equipment, manpower and resources.
Here is a great irony. If the Government think that our forces were in such an appalling state, how did they successfully command, control and organise a task force of the type that was sent to the Gulf, and which has made such an important contribution to maintaining international security? There is a certain bijou irony there.
Some observers might argue that fulfilling major deployments such as Bosnia and the Gulf while undertaking the strategic defence review places great strain on our services. Thirty years ago, another Labour Government were—surprise, surprise—carrying out one of their many defence reviews. Later, the then Secretary of State for Defence, now Lord Healey, observed the contradictory nature of simultaneously deploying and trying to review defence. Later he wrote:
I did not think it made sense to carry out an appendix operation on a man while he was lifting a grand piano".
I suggest that many members of our armed forces feel just like that man or woman attempting to lift a grand piano.
In opposition, new Labour faced reality. It moved away from unilateralism and argued that there was a need for a strategic defence review that would stop the decline in Britain's defences. The Labour Opposition said that they would properly assess Britain's strategic priorities and that the process would be foreign policy led. Every question asked by hon. Members—Conservative and Liberal, at least—to ascertain more detail was met with what appeared to be the reasonable holding answer that Labour Members could not commit themselves until they had looked at the Ministry of Defence books.
Nevertheless, in the lead-up to the general election, the Labour Opposition felt able, without looking at the books, to commit themselves to maintaining our strategic nuclear deterrent and to honour the Conservative commitment to Eurofighter—a commitment, at that time, of about £16 billion. That blew a hole through the carefully constructed arguments for a strategic defence review. On what basis did the then Labour Opposition decide to maintain Trident and Eurofighter when the strategic defence review was supposed to be foreign policy led? Why did they not commit themselves to order Challenger tanks or purchase carriers? Where did the information come from that they said in other areas was so vital that they would have to wait until they had looked at the books?
Our military friends have a saying; a bad commander—for that read politician—does not appreciate the situation, he situates the appreciation. That is exactly what Labour did before the general election.
Let us move on from the flawed logic behind the strategic defence review and see how an assessment of British foreign policy could provide the driver for the strategic defence review.

The Minister for the Armed Forces (Dr. John Reid): Will the hon. Gentleman give way?

Mr. Simpson: I gladly give way to the Minister.

Dr. Reid: The hon. Gentleman has finally tempted me to the Dispatch Box with his phrase, "flawed logic". Will he explain why the Conservatives spent the period leading

to the general election complaining, "You can't trust Labour; they won't keep Trident or the Eurofighter" and have spent the time since then complaining, "Labour can't be trusted because they are going to keep Trident and the Eurofighter"?

Mr. Simpson: I think the Minister should allow me to continue my point. He should not have allowed himself to be tempted.
If, in opposition, people argue a perfectly acceptable case—that they cannot commit themselves before looking at the books—and maintain that they will carry out a strategic defence review because they lack information, where does the information come from to cause them to say that they will keep Trident and Eurofighter but that they cannot commit themselves to other important areas? By making that declaration, they largely determined the outcome of the strategic defence review, which was supposed to be foreign policy led. I thank the Minister for his intervention.
I shall now examine the flawed logic behind the strategic defence review and see how an assessment of British foreign policy could provide the driver for it. We know, in general terms, from what the Foreign Secretary said when he launched his Foreign Office mission statement on 12 May 1997, that UK security will remain based on the North Atlantic Treaty Organisation and that the Government want to be an active member of the United Nations.
However, we still do not know the foreign policy baseline for the strategic defence review. Both the Foreign Secretary and Secretary of State for Defence have refused to publish it. Several times, the Secretary of State has replied to any question about the foreign policy baseline by saying, "Nudge nudge, wink wink, you will find bits of it in the defence debate in October 1997 and in some of the speeches that I have made to outside bodies."
Why the coyness? Why not publish the foreign policy baseline? This is open government. It is crucial that we establish what, if any, foreign policy commitments have changed and how they will impact on defence capabilities and—even more significant—resources. In default of a foreign policy baseline, Opposition Members—and I suspect that there is a nagging doubt among Labour Members—are forced to conclude that the Treasury is unwilling for the foreign policy baseline to be published before the tough negotiations that are about to start between it and the MOD. If the foreign policy baseline is not published here, on the official record, it can always be massaged to fit the budgetary restraints.
I challenge the Minister: prove me wrong. Stand up today and tell us what the foreign policy baseline is or give us a commitment. If he fails to do that, the strategic defence review is fatally flawed.
On 12 May 1997, the Foreign Secretary made great play of launching a Foreign Office mission statement, saying:
Every modem business starts from a mission statement that sets clear objectives".
Quite so. This is now the requirement for most business and industry and, indeed, the military. By any definition, the Ministry of Defence is a very large modern business, worth £22 billion, so where is the Ministry of Defence mission statement?
I asked the Secretary of State that question in June 1997. On 16 June 1997, the Minister for the Armed Forces replied:
We intend to issue shortly revised aims and objectives for my Department in the form of a mission statement."—[Official Report, 16 June 1997; Vol. 296, c. 15.]
Since then, despite repeated requests by several hon. Members, there has been no MOD mission statement.
Ironically, 50 or 100 years ago, if someone had asked an old-fashioned and politically incorrect Minister, either Labour or Conservative—or, if we go back far enough, a Liberal—he would probably have said that the mission of the Ministry of Defence was killing the Queen's enemies. That is not so today; it is a politically incorrect statement. Therefore, as the MOD moves forward the complex process of the strategic defence review, it lacks, according to the Foreign Secretary, who is laying down the foreign policy baseline, those clear objectives so essential to any modern business—or perhaps they form part of that foreign policy baseline, which remains unavailable to parliamentary scrutiny.
My second challenge to the Minister this morning is, can he either tell us the Ministry of Defence mission statement or tell us a date in the near future when it will be published?
That logically brings me to the central issue of resources. Across the board in Whitehall, the Government face the dilemma of keeping their election pledge not to raise taxes while maintaining the Conservative Government's public expenditure plans for the first two years and at the same time delivering on Labour's priorities of education, health and employment. We know that, although the Prime Minister has pledged to maintain strong defences, the defence budget will remain static at best—and at worst it will probably be reduced.
A real strategic defence review, which genuinely examines our foreign policy, our capabilities, and our possible commitments—a real one, such as the Australians had—might broadly reflect Conservative foreign policy commitments, the need to be proactive in the United Nations and to undertake the wider requirements of defence diplomacy, the need to purchase new weapons and equipment that are required and the need at least to maintain the pay and conditions of service personnel. Such a review might conclude that the defence budget should be increased—but we know that that has been ruled out, so this is not an objective strategic defence review.
The political and financial realities confronting the Secretary of State for Defence are almost insoluble. First, his constituency, the parliamentary Labour party, backs defence cuts. In a survey of Labour Members published on 11 May 1997 in The Observer, a ratio of 6:1 favoured defence cuts; the ratio rose among the 1997 intake to 12:1. Not only are many Labour Members sceptical about the need to maintain the present defence budget, many of them believe that that budget provides a milch cow for education and health.
Secondly, despite Labour denials that the strategic defence review would not be Treasury led, the evidence proves the contrary. In October 1997, the Ministry of Defence was forced to make savings of £168 million after the Treasury claimed that there had been overspending and that the savings would help to avert a winter shortage of national health service beds.
There is continual pressure—I know that the Minister is affected by it—from the Treasury to offload the cost of British peacekeeping operations in Bosnia from the contingency reserve on to the Defence vote. However, I suggest that the real financial squeeze will come from the Treasury's comprehensive spending review, which was announced in June last year and should be completed this summer. We know from the answer to a question asked in this place on 3 November 1997 that the strategic defence review is the Ministry of Defence's contribution to the comprehensive spending review. That review is tasking Departments to look for savings—it does not require them to come up with ideas for obtaining new money from the central reserve.
Thanks to the delay in completing the strategic defence review—I remind hon. Members that its publication was promised in December last year, but the completion date has now slipped and we expect it in the first half, perhaps May or June, of 1998—the Ministry of Defence's ideal solution of a quick bilateral deal with the Treasury appears to be receding into the distance. The strategic defence review is being dragged further and further into the orbit of the comprehensive spending review.
Whitehall rumours—who am I to gainsay them—have suggested that the Treasury is seeking long-term cuts of £2 billion, or 10 per cent. of the current budget, or even £4 billion, or 20 per cent. of the budget. If that is not bad enough, the MOD—like other Departments—will have to introduce resource accounting by the financial year 1999–2000.

Dr. Reid: The Tories introduced it.

Mr. Simpson: I assure any hon. Members who have not come across them that resource accounts will have a major impact on Government Departments. They will involve valuations of the MOD's assets, inflate the size of the MOD budget and make the MOD appear to other Departments even more of a Whitehall milch cow. The Ministry of Defence will be seen as a soft touch.

Mr. James Gray: Did my hon. Friend hear the seated intervention from the Minister a moment ago? In response to my hon. Friend's comments about resource accounting, the Minister said the Conservative Government introduced it. Does my hon. Friend agree that it sounds as though the Government are planning to abolish it?

Mr. Simpson: I thank my hon. Friend. I am not certain that the Government know what they are doing in this area. However, they intend to go ahead with resource accounting, which will have a major impact on the Ministry of Defence.
In the short term, the MOD budget will be under considerable strain and, in the medium term, it will be very vulnerable. That will seriously constrain the Secretary of State's strategy of paying for the MOD's one "big idea". A young officer who works at the Ministry of Defence told me recently that the staff are thinking about putting up a series of signs around the Ministry—rather like in "Alice's Adventures in Wonderland"—that will point to "The Big Idea". Ministers and their special advisers might find it one day—but it will be in the boiler room.
The Ministry of Defence's one big idea—which is largely a product of MOD studies; it has nothing to do with Ministers—is an expeditionary force capability. There is a certain irony here because, if we had been sitting in the Chamber 90 years ago, we would have been discussing the formation of an expeditionary force capability under a Liberal Secretary of State for War, Richard Burdon Haldane. We have turned a full circle in 90 years.
Even if savings are found elsewhere in the MOD budget, an expeditionary force capability will require new weapons, equipment and information technology that will not be compensated by internal savings. Even if assumptions are made that our allies will provide many of those capabilities, the United Kingdom will still require a minimum stand-alone capability, which I do not at present envisage the Government's being able to fund.
Quite correctly, the Government have emphasised the quality of our armed forces personnel and the need to sustain their morale and that of their families. We all agree about that, but how do service personnel judge the strategic defence review? We know the answer to that question because a leaked Ministry of Defence report provides the damning evidence. At the end of last year, the MOD conducted a three-week assessment of 1,500 personnel from all three services at 14 different establishments, covering all ranks from private to two-star general. In a damning phrase, the strategic defence review liaison team assessors found almost unanimous suspicion that the review is a
cost-cutting exercise dressed up in policy rhetoric".
In the spirit of openness, I ask the Minister whether he will place that report, and any other studies of service morale that he has commissioned, in the Library.
Furthermore, as the publication of the strategic defence review has slipped and slipped, many service personnel and local communities have experienced a great period of unease about their future. In my constituency, the 9th/12th Lancers—an armoured regiment based at Swanton Morley that is currently deployed in Bosnia—are concerned about their future. My constituents at Coltishall and the surrounding villages are concerned about press reports regarding the future of the Jaguar force at RAF Coltishall based in the constituency of my hon. Friend the Member for North Norfolk (Mr. Prior).
Despite all the promises and good intentions of Ministers, we are forced to conclude that the strategic defence review lacks a purpose. To paraphrase Winston Churchill, this strategic defence review lacks a theme. We are unable to determine the foreign policy baseline that is supposed to form the basis of the MOD's defence review. Ministers have been unable to produce a departmental mission statement with a clarity of purpose. The defence budget is vulnerable to pressure both from within the parliamentary Labour party and from the Government's own comprehensive spending review—and that is reflected in the mood of our service personnel. Sadly, the strategic defence review will probably come up with a requirement to do even more with even less.
Finally, I remind the House of the five tests by which I believe hon. Members should judge the strategic defence review when it is published: does it provide effective security and defence for the United Kingdom; does it

succeed in meeting the United Kingdom's national and international obligations; will our armed forces be organised, manned and equipped to meet those obligations; has the strategic defence review taken into account the twin revolutions in political and military affairs; and will the financial resources be allocated to meet that remit?

Mr. John Wilkinson: We are extremely indebted to my hon. Friend the Member for Mid-Norfolk (Mr. Simpson), who, in a wide-ranging speech, covered all the main areas of concern regarding the strategic defence review. I shall concentrate on two or three narrow issues.
I whole-heartedly welcome the strategic defence review: it will do the Ministry of Defence no harm to re-examine its fundamental practices. I also believe that it is worth while for the Ministry of Defence to make sure that it is operating cost-effectively at every stage. As for the principles which should underlie the review, I turn to the views enunciated by the former French chief of staff, General Ailleret, a few years ago. He enjoined France to embrace "défense à tous azimuts"—which I interpret to mean "multi-polar defence".
British defence has been largely Eurocentric since the beginning of the cold war—and understandably so. With the dissolution of the Warsaw pact and the multiplicity of risks and potential threats to our security and our interests around the world, that Eurocentric approach must change. We must also eliminate the old shibboleths which went with it. In a sense, those shibboleths were understandable and comprehensible.
Following world war two, we were committed to the Brussels treaty requirement to maintain a standing army of 55,000 men and a tactical air force in Germany. That requirement has been overtaken by events, and we now have only two main air bases and an armoured division in the federal republic. I urge Her Majesty's Government to re-examine our contribution in Germany. Our clear purpose should be to ensure that our armed forces possess mobility, flexibility and fire power to meet those wide-ranging threats and future potential commitments. I do not see that maintaining an armoured division and two air bases on German soil accords with those wider objectives.
The RAF is to withdraw its Harrier squadrons from RAF Laarbruch this year. I hope that they come back as soon as possible. The Tornado wing at RAF Brüggen is due to stay until 2002. For the life of me, I do not see why it cannot be returned to the United Kingdom forthwith. The headquarters has already gone back. We need to concentrate our forces in the most appropriate manner. It will be necessary to make space for those units and personnel in the United Kingdom, and this must be done.
The armoured division is a more difficult problem, especially as regards training areas, but increasingly the training facilities in Poland and Canada are being used. It is too high a price to pay for the maintenance of a three-star position as commander of the Allied Command Europe Rapid Reaction Corps that we should be committed for ever and aye to keeping an armoured division in Germany.
The French have withdrawn from the federal republic. The argument that we must be in the federal republic to maintain a United States commitment to western Europe


does not stand up. There is defence in depth now in central Europe. Were Russia ever to become a military threat again, and the countries of eastern Europe joined NATO, we would have a collective security apparatus on the continent which did not require the maintenance of extremely costly British forces on German soil.
To pursue the three objectives of mobility, flexibility and fire power, I endorse also the efforts towards more joint operations. The idea of a joint helicopter support force seems entirely sensible. I can see no inhibition or fundamental problem. Likewise, the precedent has been well established and proved in the Gulf for joint Royal Air Force-Royal Navy air groups on Her Majesty's ships. This, too, is eminently sensible. I am sure that we will see more such developments in the defence review, and rightly so.
I hope that we will recognise the United Kingdom's special contribution to European defence in the maritime and air elements, and in air mobility and amphibiosity, rather more than in highly inflexible, static armoured forces. If there must be a balance, that is the way that we must go. It can only be good for the Royal Navy. I am pleased that HMS Ocean is shortly to enter service—an appropriate decision by the previous Conservative Administration to provide a landing platform for helicopters for Her Majesty's fleet.
Beyond that, we will need to replace the Invincible class. We have seen the benefits of maritime air power in the Gulf crisis. A force can be deployed relatively rapidly. It can be poised offshore. The political inhibitions to maritime air operations are minimal.
The difficult decision will be whether to replace the three Invincible class carriers with two 40,000-ton fleet carriers, or whether we go for smaller carriers of 20,000 tons or thereabouts. I would argue that it is better to have three smaller carriers than two big carriers. One will always be in refit, and we must be able to rotate the vessels, as we are doing now between Invincible and Illustrious, knowing that it is always possible to keep one on station.
I tend to favour the smaller carriers for the United Kingdom, but I question whether it will be necessary to have quite as many Horizon 2000 anti-aircraft frigates or destroyers as was previously envisaged. The best air defence of the fleet is, of course, the aircraft carrier. I imagine that the naval staff will examine closely whether Horizon 2000 makes as much sense now as it used to do in the days when the Soviet naval air arm and the Soviet air forces posed a real threat to the NATO navies in the north Atlantic.
As for the Royal Air Force and the need for power projection and the ability to intervene—whether to preserve peace, to fight wars, or to extricate our nationals or friendly nationals—central to this capability must be an integral heavy lift capacity, particularly if it will be necessary to deploy armoured forces rapidly. We need a spectrum of capabilities to meet every contingency.
If we were unable to provide the heavy lift, we would be dependent on the United States, whose political objectives and priorities might conceivably be different in some instances, and we would be too dependent on civil carriers. The C17 has all the characteristics required for the role—the ability to operate forward, the ability to be both a freighter and a troop transport, and more significantly, a tanker for air-to-air refuelling.
I recognise that the Ministry will have difficult decisions to make about the nature of future air power. We have seen in the Gulf that air power is decisive not just to win wars, as was the case in the Gulf war, but to prevent war, by an early application of political pressure. Therefore, for the front line of the Royal Air Force to be cut at this time would be a step backwards. The Jaguars are extremely cost-effective until the Eurofighter comes into service. They are just undergoing an update at relatively low cost which will enable them to maintain an effective capability well into the next century.
A joint strike fighter will be needed. As the House knows, we have seen how the FRS2s of the Royal Navy and the GR7s of the Royal Air Force are working well together aboard Her Majesty's ships. If we had a joint strike fighter—essentially a common air frame—for both roles, it would be a sensible procurement. It could be beneficial for British industry not only because the Americans are buying it, but because a host of European allies are likely to buy it—perhaps the northern four, which have the F16, and possibly also the Italians, the Portuguese and other air forces.

Sir Geoffrey Johnson Smith: My hon. Friend knows a great deal about the Royal Air Force. Does he have in mind the American version of the joint strike fighter, in which British money has already been invested?

Mr. Wilkinson: That is indeed the aircraft which I have in mind. My right hon. Friend speaks wisely about the funding that the Ministry of Defence has already put in. British contractors could benefit considerably from the programme.
I offer two concluding thoughts, as I promised to be brief. The first is the importance of sustainability, for which reserve forces are crucial. The Government must not make the mistake of allowing the reserves to be cut further as a consequence of the review. The reverse should be the case.
If regular manpower must be drawn down, we must use reserve manpower much more. That makes sense if we are using our own resources as a community in the most cost-effective way. It makes sense if we no longer have to deploy so many people to Germany. With the legislation now in place, it is a great step forward that the various categories of reservists, not least the reserves who operate as contractors for companies already working for the Ministry of Defence, can be subject to military discipline. I hope that the Government will take advantage of it.
Finally, we should not forget the importance of the control of space for future military operations, both for reconnaissance and signals intelligence, and for ensuring the defence of these islands against potential ballistic missile attack. We will have to intensify our efforts to provide a ballistic missile defence system for this country and for our allies on the continent, and I hope that efforts in this direction will not be nullified as a consequence of the review.

Mr. Lindsay Hoyle: I congratulate the hon. Member for Mid-Norfolk (Mr. Simpson) on securing the debate. It is important that defence is discussed in


the House. The debate has presented us with an ideal opportunity to discuss many of the issues about which we all have questions. I am pleased that my right hon. Friend the Secretary of State is with us.
I am worried slightly about the hon. Member for Mid-Norfolk, whose knowledge about defence matters is second to none in the House. The hon. Gentleman goes on about defence reviews and expresses views on virtues and values along with other points of view on all matters of defence. The problem is that the hon. Gentleman did that also for the previous Government.
We are having to have a strategic defence review because of that Government's mistakes, and that is the problem. Major mistakes were made and they must be rectified. It is no use pretending that the hon. Gentleman was not involved when those mistakes were made. Certain Members were involved then; we are all involved now for the future. That is why we all wish to ensure that the strategic defence review works, and ensures that we have the right forces with the right capability to take us through the next 30 years. That is what we are talking about.
We must get things right because we cannot afford to make any more mistakes. I think that we can all agree that mistakes were made previously and that they were Treasury led. This time, we want the review to be led by the defence team. Smart procurement by a smart defence team will leave us with a smart defence force that is capable of moving around the world to ensure that a peace capability is implemented. That is why we are all here and that is what we all wish to see.
The previous Government lost out. There was no confidence on the part of the forces or among the defence industries. That is why so many Conservative Members lost their seats at the general election. As I said, we must ensure that we get things right this time.
As for the Eurofighter, the House was rightly united on what we believe will be the right aircraft for the Royal Air Force. [Interruption.] That is right. The initial decision was taken by the Conservatives and then they fudged it. The final decision was left to the Labour Government. We had to show commitment and place the orders with British Aerospace.
We all watched the "Panorama" programme. It was tragic to see ex-Members, who were members of the previous Government, questioning whether the right decision had been made or whether money had been wasted. I thought that the programme was obscene and scandalous. It did not fairly reflect the merits of an aircraft that we believe will be right.

Dr. Julian Lewis: The hon. Gentleman says that many Conservative candidates lost their seats at the election because of mistakes made in defence. Only on a few issues did the polls show the Conservatives to be leading Labour in the run-up to the general election. Well, there was just one issue, and that was defence.

Mr. Hoyle: I remind the hon. Gentleman of my constituency, Chorley, and of South Ribble and the Portsmouth and Blackpool seats. How many more constituencies does the hon. Gentleman want to be reminded of? It is easy to have a memory of convenience, but let us have a memory of fact in future.
I shall move on to talk about aircraft carriers. I do not believe that it would be right to have 20,000-ton vessels. They should be of 40,000 tons plus, because such vessels will present us with greater options. The issue involves options and costs. I see the re-emergence of the Royal Navy and the corps—the Royal Marines and the Royal Navy together will be the spearhead of any defence capability. I want to see vessels that are capable of taking a fixed-wing, one-strike aircraft. What better aircraft would be available than the Eurofighter? Let us have a Fleet Air Arm version of the Eurofighter, and let us ensure that we get the right carrier for the future.
We are talking of a mass in the form of an aircraft carrier that sits, as it were, near trouble spots. The carrier can sit beyond the horizon. We are not talking about aircraft that fly out and must return to a land base; the carrier can sit near the trouble spot. There are despots around the world and we must ensure that we have the right capability.
As for Iraq, we have deployed one carrier. What better solution would there be than to have a larger carrier to ensure that we have the right back-up with aeroplanes of the right capability. Those who voted for the Government on the Iraq issue can feel that they played their part in securing the peace that may emerge. That outcome did not derive from talks alone. The threat of defence that backed up the talks ensured peace for the time being. We do not know how long that peace will last, but those Members who supported the Government will be able to hold up their heads with pride at the end of the day. That is important.
The strategic defence review will be all-embracing. I have already touched on aircraft carriers, the Navy's ships generally and the re-emergence of the Royal Navy. There has been talk of HMS Ocean, and I accept that it is the result of a decision made by the previous Government. I am pleased that I shall be seeing HMS Ocean when it is commissioned. I am pleased to be with the Royal Marines, who have a major part to play. They have been on an exercise in Norway that was bigger than those held in previous years. That proves that the Government are willing to invest in the right troops—the right people generally—to ensure that a strong capability will continue.
We must consider British defence needs and United Kingdom manufacture. The C 17 is a wonderful aircraft that is capable of specific actions where needed. However, it does not have a true capability, and that is the difficulty. A future large aircraft really can provide the options required by UK defence needs. The FLA is a variant aircraft—it can be a tanker and it can take and lift everything except the battle tank. We know, of course, that we need a mixed fleet of aircraft. I believe that the FLA can back up what is already in place.
I should like to see us investing in UK defence, thereby creating UK jobs and ensuring that UK technology, which will be delivered in the form of defence contracts, will be transferred to the civil sector. Defence is extremely important and we cannot introduce advanced technology into the civil sector unless we have a strong defence manufacturing base. I believe that we can retain that capability, and that is why British Aerospace is important, along with Royal Ordnance plc, Vickers and many other companies that can still build aircraft, arms and ships.


Our shipbuilding capability was virtually lost when the previous Government were in office. I believe, however, that we can rebuild that capability.
We are present in the Chamber because we believe in strong defence. I did not think it fair to take potshots at the Government, who are ensuring that they can rectify the mistakes made by the previous Government. That is why I am proud to speak in this debate.

Mr. Alan Clark: In a safe at the Ministry of Defence there will probably be found a copy of the first defence review of the past decade, which I wrote. Without wishing to emulate my right hon. Friend the Member for Henley (Mr. Heseltine), who takes every opportunity to claim authorship for, and enthusiasm concerning, the millennium dome, I wish to tell the House that, were I to place a copy of my review in the Library—which I probably could do because I do not think it is classified, as I wrote it—it would be shown that all the conclusions set out in it have been validated by what has happened since.
Seven years ago, I based the review on three assumptions. The first was that the cold war was over and that our defence policy need no longer be, to use the expression of my hon. Friend the Member for Ruislip-Northwood (Mr. Wilkinson), Eurocentric. There is no longer any direct threat to the security of these islands and to the people who dwell therein. Secondly, the world remains a dangerous, deceitful and disagreeable environment in which nothing can be predicted with certainty. Thirdly, if the United Kingdom is to assert its influence and strength and reinforce its foreign policy, its strategy must be maritime.
There will be many hon. Members who are not present this morning, especially Labour Members, who will ask, "Why should the United Kingdom bother any longer? Its security is no longer threatened. We are a nation of only about 50 million people. We have perpetual constraints and bothers with our public spending. Surely this is a sector that we can abandon."
That would be an extremely dangerous decision, and one difficult to reverse. It would involve the final derogation of the United Kingdom from its role as a member of the United Nations Security Council. The UK would no longer be able to justify its seat in the G7 and on other international bodies that determine what will happen in an increasingly close and interdependent world. There would be certain circumstances—one cannot predict what they are—when United Kingdom citizens would be at the mercy of despots, just as we as a nation would be at the mercy of the super-powers in policy decisions. Our input into what is happening—so well illustrated by the way in which the Prime Minister and the present Government instantaneously reacted and deployed strength in the recent crisis—will no longer be feasible.
I fully accept that there are colossal budget restraints on the Department—my hon. Friend the Member for Mid-Norfolk (Mr. Simpson) illustrated these and reinforced them with excerpts from the rumour mill in Whitehall. If the Department is to have a serious shot at attaining the change in emphasis that is necessary for the United Kingdom to sustain its international position over the next 20 or 30 years into the millennium, there will have to be a drastic shift in resources in service allocations. We will

have to revert to the pattern of 100 years ago, when the Army was little more than a colonial gendarmerie, and our security and instrument of foreign policy was the Royal Navy. There will be immense resistance to this in the Department, as the Minister has probably already experienced. For far too long, soldiers had too prominent a say in what happened and in the decisions that were taken by the Ministry of Defence. The need to deploy and maintain a large force of infantry and armour on the continent of Europe was a hangover from the second world war, and it continued into the cold war. That is no longer the case. We can reduce to a small, elite force.
We listen with interest to the rumours about the air cavalry and to those about subsuming the Parachute Regiment into this new force. I spoke earlier about soldiers and their prejudices, and their malign influence in certain sectors of the Ministry of Defence. We all know that, for the past 40 years, the Army establishment has been determined to get even with the Parachute Regiment, to cut it down to size and, preferably, out altogether if it can. Although the idea of an air cavalry is attractive, let us hope that it is not simply used as a device to get rid of the Parachute Regiment and to subsume it into the mass infantry career structure. We do not know, but we watch.
Soldiers have to be few in number, well trained, well equipped, mobile, but should not take anything like as large a proportion of the defence budget as they do at present.
We must move towards—several hon. Members mentioned this—the certainty that a fixed-wing carrier will be the central weapons system of our armed forces over the next 50 years. It must be; there is no other way to project force and carry out the operation—illustrated so effectively, but, fortunately, not carried to the extreme—that we have seen in recent weeks.
A fixed-wing carrier or two—three would be excessive—can be bought for a relatively small sum, if one compares it with the colossal sum that is allocated to Eurofighter. I always listen to the hon. Member for Chorley (Mr. Hoyle) with great attention, but we are not of totally the same mind on Eurofighter. If the sum devoted to Eurofighter were cut in half, it would buy a couple of respectable fixed-wing carriers.
Carriers do not come on their own. There are immense ancillary costs: software, electronic counter-measures, and the support vessels that have to defend the carrier. My hon. Friend the Member for Ruislip-Northwood said that a carrier's best defence is the carrier itself, but it is a vulnerable target. The Americans have found that, to support a carrier, one needs a considerable flotilla of ancillary vessels that carry missiles and have a counter-measure capability to ensure that it is not hit. If a carrier is lost—the House will recall that that was a primary apprehension during the Falklands conflict—the expedition is cut off at the knees.
There is one other factor of which the House should be aware when considering the strategic defence review: defence policy should be considered only as part of a geostrategic review, which has to have input from the Foreign and Commonwealth Office when considering our foreign policy. It should not be Foreign and Commonwealth Office led, but that Department must have input. The Ministry of Defence is the largest client of the manufacturing industry in this country. We must be clear about the industrial implications, not just in isolation


but as they interact with the geostrategic considerations; the extent to which we shall be dependent on other suppliers, particularly foreign suppliers, or the United States; the extent to which we can take the risk of making things on our own; and the extent to which we can reassert our industrial independence, which we have neglected. All those things have to feed into a proper and round consideration of what the review should include. Only then can one start to calculate minimum force levels.
With the greatest respect to the Secretary of State, who, unfortunately, is not able to attend this interesting debate, there is scope for a commission, which the Prime Minister must chair, because only a Prime Minister can overrule the predatory, insatiable demands of the Treasury, as they will be arrayed. The Prime Minister has, as we have seen, acquired a taste for strutting the international stage and posturing as an international statesman and arbiter of the way in which our affairs are ordered—

The Parliamentary Under-Secretary of State for Defence (Mr. John Spellar): Look what he has just done.

Mr. Clark: Indeed; I have already applauded him, but perhaps that was before the Under-Secretary came into the Chamber. Unless the Prime Minister exercises his authority over the decisions and the counter-pressures that the Treasury will apply to our defence policy, the time will come—perhaps sooner than is comfortable for him—when he no longer has the muscle when he needs it to back up the posture that he is adopting.

Mr. Mike Hancock: I congratulate the hon. Member for Mid-Norfolk (Mr. Simpson) on being successful in securing the debate and on his speech this morning, but he was a little idle in his research. He failed to mention the miserable existence that service personnel and civilian employees have endured over the past 18 years, facing the consequences of successive Tory defence reviews that were misplaced, mishandled and disappointing, and dispiriting to the personnel involved. I represented my constituency in the 1980s, so I know from first-hand experience how demoralising were the successive reviews, which were never transparent in their conception and were pretty damning in their delivery. However, he gives us an opportunity—the importance of which is shown by the number of hon. Members who are present—to address once again the difficult questions of defence and the strategic review.

Mr. Gerald Howarth: The hon. Gentleman attacks the Conservative Government, despite our belief in strong defence, but is it not true that the Liberal Democrats were in favour of cutting defence by a third just before the deployment of our forces in the Gulf, so he is not really in a strong position to criticise the Conservative party?

Mr. Hancock: The hon. Gentleman makes his point, but those who were around at the time will consider the historical facts and discover that what the hon. Gentleman is saying is not only misplaced but downright mischievous because it is inaccurate.
I share hon. Members' concern that we have failed miserably to put before the House or, for that matter, the wider community, the rationale behind the foreign policy initiatives on which this defence review is based. It cannot be right for that to persist even now. Like other hon. Members, I had hoped for some appreciation in the House of the priorities. I am disappointed that that has not happened.
As considerable numbers of my constituents are serving in the Gulf, it would be wrong not to appreciate and applaud their work, and to ask the Minister to pass on good wishes and hopes for a speedy return to all the crews and personnel, men and women, serving in our fleet and on land in the Gulf. It would also be wrong to miss this opportunity to say that many families of the crew of the Invincible would be interested to know when she will return to the United Kingdom. I hope that there will be good news on the near horizon for them. I also thank my local newspaper The News for its work in pushing the story of the efforts of those people and keeping the crews and personnel down there informed of the good wishes of the people back here.
The Iraqi crisis has shown us two things. First, it has shown us that the United Nations still has a vital role to play. As a nation which took such an active part in the recent Iraqi crisis, we must use the strength that we now have to insist that the UN strengthens its position on such topics. Secondly, it raises the question of joint European defence. During the past few weeks, we have seen how difficult it is to get our European partners to agree on something as important as Iraq. We should seriously question on what they would agree.
Some of us were present at a recent North Atlantic Assembly briefing in Brussels when it was interesting to see the frustration on the faces of our American colleagues when all sorts of allegations were made about why they were in Iraq. More worrying, from a European point of view, was their riposte that they should not be pushed too hard or they would sort out the Bosnia situation by seriously considering whether Congress and the Senate wanted American forces to remain there. That was an ill-tempered threat, but it was directed at those European partners who were less than enthusiastic about why we were even considering taking action against Iraq. Once again, we missed the opportunity as a nation to use our leadership in Europe to bring our European colleagues on board. We set an example, but we were unable to lead our European colleagues to back us more enthusiastically. That is a disappointment that many share.
Like other hon. Members, I had hoped that we would have got to the bottom of where foreign policy issues were taking the defence review. Many of us who would be accused of being cynical would say that, because the Foreign Office initiatives have not been published, they have moved up the road from the Foreign Office to the Treasury. Before they come here, the Chancellor and his colleagues are running their beady eyes over them. As a result, the House is being denied the opportunity properly to evaluate the defence review in its true light.
We have been told time and again that the review would be an exercise in transparency which would involve people. Hon. Members have had the opportunity to be involved and I am sure that the Minister will tell us how many members of the public have joined in enthusiastically in one form or another, but the Government have failed to be straight and honest about


what was driving it. Was it the Treasury's insistence on substantial cuts or a genuine attempt to allow foreign policy, for the first time, to be open enough to drive a defence review that would realistically address the defence ambitions of the British Government and the British people?
I support the views that have been expressed about the fixed-deck carriers. The country cannot afford three, but we shall need two. HMS Ocean is a major addition to Britain's fighting capabilities. However, I also agree with the points made by the hon. Member for Chorley (Mr. Hoyle) about the role of the Royal Navy and a strengthened Royal Marine corps, and their strategic responsibility in defending the foreign policy issues that Britain holds dear.
If we lose this opportunity, we shall fail miserably. People will not forgive the Government for denying them the real opportunity to bring together our defence and foreign policy objectives. It is unfair and unforgivable to insist that men and women in our armed forces should take on more and more tasks without the proper resources. It would be unforgivable if the Government were to repeat the awful mistakes that many experienced during the 1980s and the early part of this decade.

Mr. Robert Key: I congratulate my hon. Friend the Member for Mid-Norfolk (Mr. Simpson) on his tenacity in securing the debate. He is right to have persisted since before Christmas. The Ministry of Defence currently has other things on its mind, but Ministers have repeatedly made it clear to the House that, with regard to the strategic defence review, the show must go on.
I thank my hon. Friends for their contributions. My hon. Friend the Member for Ruislip-Northwood (Mr. Wilkinson) shared with us his deep knowledge and my right hon. Friend the Member for Kensington and Chelsea (Mr. Clark) showed us his particular insight and his important vision of the way forward. It is always a pleasure to listen to the hon. Member for Chorley (Mr. Hoyle)—whose heart is in the right place, even if he does have a tendency to rewrite history—and the hon. Member for Portsmouth, South (Mr. Hancock), with his particular responsibilities as a Member of Parliament representing Portsmouth.
Recent events in the middle east have given the Royal Navy a providential opportunity to demonstrate its strength in force projection. Not since the first world war has chemical and biological defence assumed such importance for British forces. All three services have reacted swiftly and efficiently at a time of international crisis, and we congratulate and thank them.
What lessons have the Government learnt, what conclusions will they draw and how will they inform the strategic defence review?
Defence is rarely the subject of political knockabout. It rarely attracts large numbers of hon. Members to Question Time and debates. However, today it is important to note that the Secretary of State has been here for part of the debate, the Minister for the Armed Forces is here and the Under-Secretary was here. No doubt, the Minister for Defence Procurement is watching on his television in another place.
I emphasise that Her Majesty's forces know that a comparatively small number of Members of both Houses have a deep knowledge of, and commitment to, Britain's

defence, and that they can be relied upon to be persistent and tenacious in pursuing military matters. They also know that, at times of tension, both Houses of Parliament can be relied upon to swing behind them with generous cross-party support. Most service men and women would wish that defence was not a party political issue. Defence should stand astride the common ground between the parties.
After 18 years in opposition, Labour's understanding of defence issues was incomplete. It reformed its party's defence stance and the Labour Government's policy is now on trial. They pledged that they would have a defence review, but they did not know what to expect, and that is clear 10 months on. Labour chose the big bang approach, rejecting our philosophy of continuous review with occasional necessary reforms. They have not said, and we do not know—I doubt whether they know either—whether they will revert to the continuous review process or adopt the Australian and American pattern of a review every three or four years.
We were told that the SDR would be over in six months and that the uncertainty in the armed forces and the defence procurement industry would be worth putting up with. Apart from the Secretary of State, no one believes that the review is now foreign policy led. Clear as he was about the downward ratchet in defence spending—I hope that he took note of the wise words of the Chairman of the Defence Select Committee in last week's debate on Iraq—the Secretary of State has been consistently unclear about the nature of Foreign Office and Treasury involvement.
My hon. Friend the Member for Mid-Norfolk has already drawn attention to the lack of a clear statement on foreign policy baselines, as has the hon. Member for Portsmouth, South. The Secretary of State continues to expect us to believe that his speech at the Royal United Services Institute on 18 September last said it all. It said virtually nothing new—I read it again this morning. It will not do for him to pretend that we know about those baselines. They remain secret and out of date.
Both the early consultations and the establishment of the foreign policy baselines last August have receded so far into the past, and world events have moved forward so quickly, that serious doubt must be cast on the validity of both. We have also had a long period of silence from the Secretary of State. According to the Ministry of Defence, since he was appointed last year, he has made just four speeches on defence policy, only one of which was on the strategic defence review. He made two speeches on NATO and one on defence diplomacy, a concept originally introduced by the Conservative Government in their 1981 defence review White Paper. Will there be no more speeches from the Secretary of State until the SDR is safely out of the way?
Ministers now appear like rabbits caught in the Treasury's headlights. The military input will be complete by the end of March as promised. Defence Ministers will no doubt reach conclusions by the end of April. Then all that work will disappear into the black hole of the Treasury and the Cabinet Office. The comprehensive expenditure review will take time to resolve. We might be lucky and have a statement on the SDR by June, or it might slip to the last week of July—perhaps to the last day that Parliament sits before the recess. All that will give the Treasury an opportunity to push the whole exercise into the next public spending round, implying no


real movement on the SDR until April 1999. Two years after the Government's election pledge, with the world a different place, the Government will hope that the Opposition will support the results of the review.
Defence Ministers should be aware that they are putting at risk cross-party support by their failure to listen and to answer the concerns expressed not just by Opposition Members but by Labour Members. I absolve the Minister for the Armed Forces from that accusation. We recognise that he is a tireless worker for the armed forces and that he can be relied on, with his grasp of detail and his patience and courtesy, which are much appreciated. However, I wish that he would have a word with the Secretary of State and the Under-Secretary because routinely in debates, questions have been asked and points raised, which are apparently not heard and certainly not answered. Even in last week's debate on Iraq, my right hon. Friend the Member for North-West Hampshire (Sir G. Young) made some good points and asked some straightforward questions but received no answers.
I mentioned the new significance of chemical and biological defence. The proliferation of chemical and biological weapons is a major threat to the peace and security of the global community. The previous Government recognised that and invested in substantial facilities to combat the threat. The time has come for further appraisal of active and passive defence against chemical and biological attack, both military and civilian.
It is our choice to stand by the United States. We must be as good as the United States. The 1999 US defence budget will add $1 billion to counter chemical and biological threats. How much new investment will the strategic defence review suggest for us? How much will the Treasury then allow us?
Similarly, we cannot afford to be left behind, following the revolution in military affairs that now informs so much defence planning. Since last May, the world has become less stable and more dangerous. British military forces are under increasing pressure and peace in Northern Ireland is more fragile. Abroad, Bosnia remains the top priority for Britain's and NATO's long-term commitment. In Bosnia, we must consider the need for a smaller but more permanent and established presence, and we need to overcome the current lack of a corporate memory. Escalating ethnic tensions in Kosovo could provide the next flashpoint in the Balkans.
Will the SDR require cuts in our contribution to NATO, material and financial? The "Partnership for Peace" process absorbs substantial resources, mostly to good effect, but there is little Mediterranean dialogue. NATO's troubled southern flank poses threats to Europe's political, economic and military stability. Further afield, we cannot ignore the potential for trouble over the Spratly Islands in the South China sea, nor events involving our dependencies in Commonwealth countries. More immediately, tensions in the middle east will require our constant vigilance and continuing military presence. Our military relationship with Turkey should have a higher priority.
Back home, the Green Papers on the Defence Diversification Agency and the future of the Defence Evaluation and Research Agency are now three months late. Unclear of their priorities and befuddled by their

vision of Europe, the Government want to maintain their special relationship with the USA while demanding that our defence industry merges our efficient world-class companies with some of the nationalised, subsidised, dinosaur industries elsewhere in Europe—answers by 31 March please, on one side of a postcard.
Above all, the performance of our forces depends on our people and their training, equipment and morale. If we are to recruit and retain good people, we must spend what it takes to achieve that. If we want their families to follow the flag, we must not skimp on housing, education, medical services and the quality of their lives.
Last July in Coventry, I attended a consultation seminar on the strategic defence review. The Secretary of State said that there should be no expectation of an increase in defence expenditure. He asked me whether I thought that there was a case for an increase and I am glad that I said yes. I say it again today. If we are to relate this nation's defence policy to the real world rather than to some diplomatic utopia, this is no time to contemplate further cuts. We should not rule out the case for increased defence spending, review or no review.

The Minister for the Armed Forces (Dr. John Reid): So many questions have been asked and there is so little time to answer.
I doubly congratulate the hon. Member for Mid-Norfolk (Mr. Simpson): first, on obtaining this debate and on the wisdom that he brings to it; and, secondly, on having discovered a new smelting process for brass necks, which produces those of a quality, strength and thickness that have never previously been invented. He combined that with modesty: in his own modest way he failed to declare an interest, in all humility, as an architect of the Conservative Government's policy of the past 10 years.
Had the hon. Gentleman declared an interest as a special adviser to a previous Secretary of State for Defence, he would have had more difficulty convincing us that we must not cut defence spending, when he advised cutting defence expenditure by 30 per cent.; that we must not reduce personnel numbers, when he advised reducing them by 32 per cent.; or that we must produce a mission statement within six months, when he failed to do so in 18 years. I understand the hon. Gentleman's modesty. In a consensual fashion, I had not intended even to refer to the Conservative Government's record, but I thought that we should place in context some of the remarks that have been made.
Let me say from the outset that our commitment in opposition to conducting a strategic defence review, rather than a cost-driven exercise, was central to our determination to provide Britain with strong, capable and modern armed forces. That was our analysis of the need then, and it remains our goal now. Events have proved how right we were to make that decision, for three reasons. First, a policy-led review is the only way comprehensively to assess how our forces should be structured, equipped, trained and deployed to meet the challenges of the 21st century. Only that approach has the potential to afford the armed forces and the Government the coherence and clarity of purpose that they deserve.
Secondly, inherited shortfalls have led to inadequacies, some of which were identified during the strategic defence review. We were unable fully to appreciate them:


as the hon. Member for Mid-Norfolk correctly pointed out, the information was not at our disposal until we came into power.
Headline issues arising from the strategic defence review bear repetition. I allocate no blame, but we must face up to the fact that we cannot transport forces quickly enough or provide the necessary logistic support once they have deployed. Our medical services are thoroughly inadequate. Some parts of the forces cannot communicate effectively with other parts. We face a vicious circle of undermanning and overstretch, which feed on, and exacerbate, each other.
I am not being party political, but we have to admit that there are real problems before we can begin to solve them. It is the easiest thing in the world for politicians at the Dispatch Box to use rhetoric that gets more robust the weaker their arguments become, rather like the Jesuit who comes to the part of his sermon about which he has doubts and writes in the margin, "Shout louder." Surely the days are gone when the services are burdened with increasing inadequacies so that political leaders do not have to find the moral courage to face up to the hard choices. Those problems must be tackled to ensure that our armed forces can be deployed rapidly, flexibly and effectively.
Thirdly, undertaking the strategic defence review was the right decision. We owe it to the brave men and women who risk their lives on our behalf day in, day out—not only when they are in the headlines—to ensure that we have a coherent vision of the future use and structure of our armed forces. Paying further tribute to the men and women of our armed forces is timely. Last night, Kofi Annan, the United Nations Secretary-General, congratulated the Prime Minister on being "the perfect UN peacekeeper". That was not only a justification of the Prime Minister and of the House, and of our commitment to the UN; the accolade was also for the men and women who serve in our armed forces. I cannot convey how proud I am to be associated with them and their efforts day in, day out. It is the Government's duty to give them a coherent vision of the future that recognises their vital contribution. We owe it to them to ensure, through regular scrutiny, that the means at their disposal match their commitment to the tasks set for them by the Government. Only a truly strategic defence review will allow us to address those issues.
I shall quickly cover the main points arising from the debate. First, despite the banter that goes on in the House, our approach has, from the start, been to try to achieve consensus. To use an old cliché, I believe that Britain works best when we work together. Defence is too important to be a political football. I agree with the hon. Member for Salisbury (Mr. Key) that, where possible, national security should be above party politics, which does not mean that there will not be any criticism and that the Opposition should not oppose. Our desire to achieve such a framework arises as much from the acknowledgement of our past mistakes as from our commitment to try to avoid them in future.
Whatever the criticisms, there has been unprecedented consultation during the review. Hon. Members have been involved, and more invitations are going out to members of all parties; seminars have been held; we have involved journalists, academic institutions and ex-military people as well as the Foreign Office and the Ministry of Defence; and industry and trade unions have also played a part. We

have spent a great deal of time on the review: the message that comes back from the forces is that it is better to get it right than to rush it.
We have been particularly keen to listen to the troops. For the first time, a strategic defence review liaison team was established. The team has met thousands of service men and women outside the chain of command. As requested, it responded robustly and frankly, and told us exactly what has been said. There is good will among the troops and morale is high, but there is concern that our review may be the same as those undertaken by the previous Government, which were perceived to be Treasury led.
The hon. Gentleman would have given a fuller picture if he had said that concerns arise not because people are suspicious of what we are doing, but because of their experience under the previous Government. Therefore, we are making every attempt to show that the review is foreign policy led: it is based on a fundamental reassessment of our essential security policy and defence needs and was conducted in its early stages jointly by the Ministry of Defence and the Foreign Office.
We have outlined the conclusions that are emerging, but there is dispute over the extent to which the work should have been done earlier. First, our armed forces have inescapable national commitments. Military aid must be provided to the civil power in Northern Ireland: we hope for a lasting political settlement in the Province, but will not count our chickens before they have hatched. We are responsible for the internal and external security of our dependent territories.
In Europe, we must ensure European and British security by making a commensurate contribution to the maintenance of the North Atlantic Treaty Organisation, which was a manifesto pledge. The collapse of the Soviet Union has radically reduced the threat of all-out war in Europe, but it has given rise to a plethora of risks—nationalism, border disputes and ethnic tensions—that were suppressed by communism. We have wider global interests, but they do not extend equally and we are most likely to be involved in such problems in Europe, the Gulf and the Mediterranean, where our economic and security interests are most closely engaged.
Other global threats form part of our policy baseline. Recent events in the Gulf have brought home to us the risks from nuclear, chemical and biological weapons. Just as the citizen has rights and responsibilities, this country, as a national citizen in the global community, has rights. Our armed forces will defend them, our territories and interests, abroad and at home. We have responsibilities commensurate with our position at the United Nations and in NATO, and as a leading country in Europe, and we shall discharge them.

Mr. Keith Simpson: Will the Minister give way?

Dr. Reid: No. I have only 14 minutes in which to respond to the debate.
Additionally, we have embarked on a defence diplomacy initiative, which means using the military assets necessary for the defence of our country in such a way as to lessen the likelihood of their being deployed in anger in war. My right hon. Friend the Secretary of State for Defence co-operated on that sensible, relevant and modern policy framework with the Foreign Office. As is


the case in every Department, the Treasury has been consulted. That is the normal business of government—but it does not mean that this review, like the rest, has been led by the Treasury, or by any arbitrary dictates of the Treasury. The starting point has been foreign policy.
Of course resources matter. We live in the real world. I have tried to deal with the main points in the limited time available, but let me make one final point. The cliché that people are our most precious resource is no less true because it is often uttered. People are at the centre of our strategic defence review. We are looking at a range of policies—not only because that is morally good, but because the third element of fighting power, morale, is the most underestimated. All the equipment and all the doctrine in the world mean nothing if we do not ensure that our people are properly protected and resourced. We are proud of what we have done in the Gulf, and will justify that—

Mr. Deputy Speaker (Mr. Michael J. Martin): Order. We must move to the next debate.

Special Needs Education (Croydon)

Mr. Richard Ottaway: The House debated special educational needs as recently as December. The Under-Secretary of State for Education and Employment, the hon. Member for Birmingham, Yardley (Ms Morris)—who I am pleased to see is replying to today's debate—set out her proposals and priorities for special educational needs in the light of the Green Paper published in October 1997. She made it clear that the Government were not adopting a cost-cutting approach to SEN—a message that, regrettably, was not heard by Croydon council.
The Minister and others also acknowledged that life had not started on 1 May 1997, and we were grateful for the tribute that she paid to the last Government's work in developing what was a rather grey area. I myself pay tribute now to my right hon. Friend the Member for Bromley and Chislehurst (Mr. Forth), who, as Minister of State in the Department, did much to address the issue.
I broadly welcome the Government's six principles, enshrined in the Green Paper, and their detailed approach to the subject. We are talking about some of the most vulnerable people in society, whose needs go far beyond the imagination of those with healthy children. No political ideology is involved; we all owe it to under-privileged children to give them the best education that our nation can provide.
An important principle established in the Green Paper is the need to work with parents. The Green Paper rightly says that parents of children with special educational needs face exceptional pressures, and the Government rightly say that they want to help parents cope with those pressures and to give them real opportunities to influence and contribute to their children's education. During the December debate, the Minister reminded us that partnership between home and school is crucial for all children.
By and large, special needs education in Croydon is, in the words of the weather men, fair to good—with one notable exception. We have two schools, Redgates and Priory, helping those with severe learning difficulties. The main thrust of the borough's provision of services for those with moderate learning difficulties comes from two schools, St. Nicholas in my constituency and Bensham Manor. Each school originally provided for the five-to-16 age range. They are excellent schools, and they catered respectively for the north and the south of the borough.
In a fairly controversial move that upset many parents, the two schools were reorganised so that St. Nicholas provided for the five-to-11s and Bensham Manor for the 12-to-16s. Unfortunately, that means that, on reaching the age of 12, children in the south of the borough must make a long journey to the north.
This is a highly relevant factor in Croydon's education service. Croydon is a large, wedge-shaped borough with crowded roads, which makes travel from south to north and into the heart of London very difficult. Services must be provided in the south for all age groups. Having been educated at St. Nicholas, in the leafy glades of the suburbs, children are obliged to undertake the journey through those crowded streets to a strange part of town with which neither they nor their parents are familiar. The north-south divide in Croydon is the real cause of many of the borough's problems.
Last summer, St. Nicholas was found to contain asbestos, and it has been necessary to relocate the school temporarily at the Heath Clark adult education centre. I understand that it will return in September, and that the building will then have been fully refurbished. I congratulate the council on its prompt response to a particularly difficult problem.
St. Giles school in Pampisford road is an inspiration to all who visit it, showing them what can be achieved. It contains facilities not only for those with physical mobility problems, but for those who are deaf and blind. I pay tribute to the staff of St. Giles. If the Minister ever wants to see a good example within easy range of her office, that is where she should go.
There were four day care centres for the under-fives, one of which was the Hazelglen special educational needs school—the only one in the south of the borough. In September 1997, Croydon council published a document entitled "Policy for Pupils with Special Educational Needs". It is well drawn up, and its principles largely coincide with those in the Green Paper. It builds on the work of the last Government and the last administration in Croydon.
Regrettably, the words of that document contrast markedly with the actions of the politicians on Croydon's Labour council. It was produced after the outrageous closure of the Hazelglen special educational needs school for the under-fives. That closure was in blatant disregard of the principles in Croydon council's code of conduct, and the six principles in the Green Paper. Today, I want to know the real reason why the school was closed. If the Minister cannot give me the reason, I shall call for an inquiry into why the closure took place in breach of the Government's stated principles that this is not a cost-cutting area and that parents will be involved.
In the 1994 London borough elections, the Labour group, in its manifesto, issued a number of pledges on education and on special educational needs in particular. Under the heading "Nurseries and Child Care", it stated:
Labour will provide more nursery facilities to enable parents to find jobs".
Under "Nursery Education", it stated:
An Education Officer will be given enhanced designated responsibility for the under-fives and will work with the Social Services Department, the Health Authority and the voluntary sector to develop an integrated borough approach to the needs of the very young".
Under the heading "Special Educational Needs", it stated:
We will provide clearer and more consistent funding for the special educational needs of pupils".
Finally, under the heading "Services for people with learning disabilities", it stated:
A Labour council will aim to provide a variety of day care centres".
It is clear as a bell that Labour was committed to maintaining and improving the system, and on that basis people voted for it. It was a clear pledge, and people expected Labour to deliver.
The Hazelglen centre provided SEN facilities for children under five. Typical of the children who went there were the children of Sioban and Tom Foster, who have cystic fibrosis. They needed physiotherapy, a special high-fat diet and extra vitamins and drugs. In addition, one of the children has cerebral palsy and hydrocephalus.

They depended on the centre for the support that they needed. Others—the Kellys, the Finlays, the Traffords—also depended on Hazelglen, and relied on Labour's commitment, which they were entitled to view with optimism. Accordingly, their lives were shattered when on 5 February parents received a letter stating that the school was to close. It said:
The decision to close the Centre is a financial one and is not connected in any way to the quality of service provided by the staff.
Offering parents a chance to meet the officials involved, the letter went on to say that, "for this reason", the officials
will be at Hazelglen at 10.00 am on Thursday 6th February so that you can raise any issues directly.
That was just 24 hours after the announcement of the closure.
The closure was the end of the principle of working with parents. It undermined parents in a cruel and uncaring way. It was an absolute bombshell for parents who, having had their lives shattered on learning of their children's problems, were now being completely undermined.
In addition to dismay about the broken promises and short notice, there is concern about the way in which the closure was carried out. It seems that the manager of the centre was told about it three months before it happened, and was asked to keep his mouth shut. Accordingly, it was no surprise when the staff of the social services department wrote to members of the council's social services committee stating:
As a caring Team committed to our work, we feel that the council's meetings and the length of time it has taken to inform us of proposals devalued the professional manner in which we work and operate the centre.
I could not have put it better myself. It is already apparent that not only the school's merits but educational needs were ignored, and that the matter was completely financial.
The Labour councillors behaved no better, slipping figures into a social services budget report. There was no statement or explanation, no debate, and not even social service minutes on the closure. Only the Conservative councillors are recorded as voting against the budget when the first inkling of the decision was revealed.
The parents of the children at Hazelglen could not understand that, while the school was being closed, £1 million was being spent on decorating Croydon's pavements with red bricks; £750,000 was being spent on producing a glossy magazine; £350,000 was being spent on a pavilion in South Norwood; and £61,000 was being spent on lasers to light up Croydon. Thousands of pounds were spent to buy mobile phones for Labour councillors. Against that, a mere £24,000 was saved by closing the Hazelglen day centre.
The illogicality becomes apparent when we note that some of the children are now being placed in private care that is paid for by the council. That makes a mockery of Labour's pledge in opposition and in government.
All was revealed when Mr. Tony Foster wrote to the Croydon Advertiser, a newspaper that has done much to disclose the scandal of Hazelglen. His letter states:
My response comes in the context of being both a campaigner against this closure and as a local Labour Party member.


The truth of the matter is that Hazelglen is caught up in the internal politics of the Croydon Labour Party. The decision to close Hazelglen is therefore political and not financial. Hazelglen, unlike the other day care centres in the North of the borough, has suffered from budget cuts every year since Labour took office. The closure has been planned for years and is not the result of 'financial pressures' from this year's tight settlement.
Having realised the paucity of the financial argument Labour has resorted to claiming that Hazelglen is not as accessible as the other centres. This is despite of it being located on top of not one, but two BR stations (Sanderstead and Purley Oaks) and with local bus stops also. Incredible!
Hazelglen is, therefore, the nursery that is being closed for no reason and in this entire process the Labour council has shown contempt for the principles that the Labour party should stand for: democracy, social justice, decency and integrity. I believed that Labour was set up to fight injustice, not to cause it. Maybe, I was idealistic, but the disappointment is profound.
As I say, that letter was from a Labour party member.
Most amazing of all was the fudge and obfuscation of Labour councillors and Ministers. I took up the matter with Mr. Charlie Burling, who at that time was chairman of Croydon council's finance committee, and asked him to receive a delegation of parents. In a letter under the slogan "New Labour, New Life for Britain", he refused. His refusal to meet a delegation was to cover up the internal rows in the Labour party.
The bluster and cover-up continued. I wrote to the Secretary of State for Education and Employment, and his reply on House of Commons notepaper states:
The closure of Hazelglen was authorised by the previous government".
I decided to take up the matter with his Under-Secretary of State, the hon. Member for Yardley, who is replying to today's debate. In the debate on 5 December, I asked her to look into the matter, and she courteously agreed. She carefully relied on advice on the closure that was given to her by Croydon social services department, and in her letter she gave the following reasons, quoting Croydon:
the centre was not best located for families in the West and South of the Borough; the average occupancy was lower at Hazelglen than at the other day care centres in the Borough; and the level of need in the areas covered by the centre was not as marked as in the south east and north of the Borough.
None of those reasons is true. Although I said that they were totally contrary to the explanation that was given by the council to the parents, which was that the decision was financial, the Minister wrote to me again stating:
I understand from Croydon Social Services Department that the decision to close Hazelglen was based on the factors cited in my previous letter, but that this was prompted by the financial situation facing the Council.
The Minister's letter contains a slight shift of emphasis. It continues:
You also say that the closure of Hazelglen means that there is now no special needs nursery education in the south of the Borough. Croydon Education Department have explained that all nursery classes in the borough are expected to support children with special education needs. I understand that specifically in the south of the Borough there are a total of 184 nursery places in schools receiving significant input from other agencies, a further 156 places in schools situated in areas of relative deprivation and a pilot project at an infant school which provides 104 places.
That information is simply not correct. First, the Minister should know that there is a big difference between nursery classes that focus only on educational needs, and day care, which is what many of the children at Hazelglen needed. Secondly, Croydon council's nursery

expansion programme reveals that only 15 per cent. of any additional nursery places will go to the south of the borough.
According to a council report that I received only yesterday, the most generous interpretation is that there are only 65 special needs places in the southern part of London's largest borough. It is worrying that there is a complete absence of a good explanation for the closure. It was badly handled and upsetting, and stressful to all concerned. It was in breach of Labour's manifesto commitment, of Croydon's policy on special educational needs, and of the Green Paper principles; and it is a breach of faith with the parents and children of Hazelglen.
I shall give the Minister a final flavour of how the parents feel about this matter by reading a poem for Croydon Labour councillors. It reads:

"A teardrop trickles down my cheek,
Looking for a place to hide.
Why couldn't you be honest,
Not cheated us and lied?
I wonder if you mock us
When we're no longer there,
If you laugh we voted LABOUR
And we fell into your lair.
Did you ever really worry?
Or was it simply fun,
To pull the strings of people's lives
And watch the damage done?
We took you all for honest.
We thought you would be true.
A victim of your silly games,
Now what are we to do?
We feel the pain so deeply,
We only wish you knew,
Of all that we have suffered,
As a result of trusting you!"

That poem is signed "From the parents of Hazelglen". Is that what new Labour is all about?

The Parliamentary Under-Secretary of State for Education and Employment (Ms Estelle Morris): I congratulate the hon. Member for Croydon, South (Mr. Ottaway) on again managing to bring the needs of his constituents, especially for early years special education, to the House. He made an important contribution to our debate on the matter before Christmas and to the Green Paper, which I appreciated. I recognise his continuing concern, not only about SEN but for the children of his constituents.
I shall continue from where we left off in the previous debate on the matter, which took place just after we published our Green Paper on SEN, which, I am pleased to tell the hon. Gentleman, has resulted in more than 3,500 responses. That is a massive response, on a subject that has not had as much attention in the past as it deserved. Croydon was one of the local education authorities that responded. We look forward to analysing the detailed responses and taking the agenda forward.
I share the hon. Gentleman's concerns about SEN and about early identification and assessment. Whatever differences we may have in the rest of the debate, I know that we shall share concerns about those matters in the years ahead. Such issues unite the House, and I am happy to pay tribute to all those hon. Members who put them at the centre of their concerns.
I mentioned the importance of early identification and assessment and, in view of the passion with which the hon. Gentleman spoke about the closure of the nursery in his constituency, it is necessary to give the reasons for that importance.
I know that the hon. Gentleman will be concerned about early identification and assessment. He knows that, unless we get it right in those crucial early years, we stand little chance of getting it right elsewhere in the education system. Moreover, I agree with him that early identification is even more necessary for children with SEN than for any other identifiable group.
Although I would never pretend that early intervention and support will remove the need for support later in a child's school career, they accomplish three crucial objectives: first, they reduce the need for later support; secondly, they send a message that we have high expectations of all children, including those with SEN; and, thirdly—I know that the hon. Gentleman will be in accord with this objective—they establish at an early stage the vital relationship between parent and teacher and all the other professionals who work with children with SEN.
I share the hon. Gentleman's long-standing concerns about nursery provision for children with special educational needs in Croydon. As he said, we have corresponded—I think twice now, although he has corresponded also with the Secretary of State—about the closure of Hazelglen nursery.
As the hon. Gentleman knows, closure of the nursery is a matter for the Croydon local authority. As it is not a school, neither the Department for Education and Employment nor the Department of Health has any statutory powers to intervene. However—because of our shared concern about special needs—I am concerned if he feels that its closure has meant that the south of the borough, which he represents, will have no provision for nursery-age children with special educational needs.
I have spoken to Croydon—which will inevitably be one of the sources of information used by the Department. The comments made in this Adjournment debate also will be taken on board and investigated by the Department. Moreover, I shall happily reply to the hon. Gentleman if he wishes to continue our correspondence.
I have been told by Croydon that its policy is to ensure that all the nurseries it maintains offer places for children with special educational needs. Almost 450 places are available for nursery-age children in south Croydon. Specifically, the borough maintains four nursery schools that give priority to children with SEN and are resourced to do so. Two of those are in the south of the borough.
Additionally, nursery places are attached to two special schools, and 35 nurseries are attached to mainstream schools—15 of which are in the south of the borough. All those nurseries can and do offer places to children with special educational needs. Currently, 54 nursery-age children in Croydon are statemented, and all of them have nursery places.
I hope that that information will at least partly allay the hon. Gentleman's concerns. I should add that 65 children in the borough currently benefit from the portage system, which is a very valuable part of early years service.
I heard what the hon. Gentleman said about the special needs of SEN youngsters. I would not be happy if those needs were not being met specially within an early years institution. However, I should not be keen to make the judgment that those needs can be met only within a special educational needs nursery, although they have a very valuable role to play. I am sure that he will agree that nurseries that do not specialise in SEN children could, with support, offer a very good-quality service to those children. As the Green Paper indicated, such matching and variety of provision is the route that we want to pursue.
My information from Croydon is that it offers those two categories of service and specialised support. In Croydon, 43 per cent. of children with statements of special need are in special schools, whereas 57 per cent. are in maintained schools with either units or people to support statemented children. I think that such a varied, and I hope flexible, approach to children with statements of special educational needs shows the way forward.

Mr. Ottaway: Neither the letters from Croydon council nor these from the Minister to me gave those reasons for the closure. If those are the reasons, why were they not given? The truth is that they were not the reason why the school was closed.

Ms Morris: All I have attempted to do is state the provision that Croydon feels it is offering for special needs children. That is the pattern on which it has embarked in making nursery provision for all its statemented children.
I understand what the hon. Gentleman said about Hazelglen day centre. Any closure and any change is disturbing and distracting for parents and young children. As a constituency Member of Parliament, I realise that, every time a school is closed or threatened with closure, someone's life is affected. Such changes perhaps cause that person temporarily to have a more disjointed existence. However, I hope that the hon. Gentleman will agree that we would never make progress if we set everything in stone.
Croydon's letters to me, and certainly my second letter to the hon. Gentleman, acknowledged that, on the basis of last year's financial settlement—not on the basis of the financial settlement that this Government have offered for next year, although I do not attempt to make political points—the financial situation was one of the factors that drove it to reassess the matter.
In my letters to the hon. Gentleman, I said also that the reassessment was prompted by the fact that
the centre was not best located for families in the West and South of the Borough",
and that average occupancy was lower than in other day care centres. I wrote also that Croydon had said that
the level of need in the areas covered by the centre was not as marked as in the south east and north of the Borough.
I would defend a local authority's right to replan its provision. Authorities must occasionally do that, because it is right for them to assess where they are at and where


they want to go. Croydon maintains that Hazelglen is part of that redevelopment, and part of the necessary change in achieving its vision for meeting the needs of children with SEN and their parents in the borough of Croydon.
Croydon gave a commitment—I am sure that the hon. Gentleman will tell me if it is not being met—to the users of Hazelglen day care centre that the children there would receive alternative services. I am told that that commitment has been honoured, and that many of those children are moving into nursery and reception classes. I am sure that the hon. Gentleman will tell me if he feels that what Croydon has told me is not an accurate reflection of the situation there. However, I accept that a period of change is sometimes difficult to handle.
The hon. Gentleman gave the impression, both in his correspondence to me and in his speech today—it is important to get it straight now—that Hazelglen was a special needs nursery. Hazelglen was established not as a day care centre to meet the specific needs of special needs children and their parents, but to offer a wider service. That includes children with SEN and their parents, but it also includes other children and parents. It is right to establish that fact.
I am pleased also—I am sure that the hon. Gentleman will welcome it—that the Hazelglen site will be developed as a family resource centre. Croydon has an agreement with Barnardo's—a national children's organisation of very high repute—to implement that planning—

Mr. Ottaway: Maybe.

Ms Morris: I am told that it is a bit more than "maybe", and I hope that it comes to fruition. I very much

hope that—if we were to return to this debate in a year or even less—the hon. Gentleman will be able to say that, "Yes; as ever, the period of change was difficult and challenging, but the new facility on the site is continuing to offer provision that meets the needs of families in my area."
Although I do not under-estimate for a minute the hon. Gentleman's concerns about children and parents at Hazelglen, I was pleased to hear his tribute to other providers—schools and units—in Croydon. In preparing for this debate, I inevitably became better versed in what is happening in Croydon. I was very pleased to note the match of provision—the special schools and units—provided by Croydon. St. Giles school, which he mentioned, is one of those in which a special unit for the hearing and visually impaired has been attached. That is very attractive.
For all that the hon. Gentleman has said about Hazelglen, he represents a constituency in a borough that has, over the years, provided for the needs of special needs children in an imaginative manner—which, as he said, he has supported. Although I do not want to put a time limit on it, I should like to accept his offer to visit St. Giles school—which he has offered to the House as an example of good practice. That is how we want to develop policy—by learning what works, seeing who has got it right and then letting the rest of the country know about it. I am sure that some of the changes taking place in Croydon with regard to early years provision and how to meet the special needs of certain youngsters will in time be the sort of good practice from which we can learn and which we can spread to the rest of the country.
Again, I congratulate the hon. Member for Croydon, South on keeping the needs of his constituents at the forefront of our mind. I also want the needs of this particular group of people to be met, and I very much hope that the hon. Gentleman's fears will be allayed in the near future.

Utilities (Foreign Ownership)

1 pm

Mr. John Cryer: I must first thank Madam Speaker for selecting this debate. I also thank my hon. Friend the Minister for Science, Energy and Industry for being here to listen and respond to it. I am sure that my hon. Friend will expect me at some point to call for public ownership of the electricity utilities, and I will not disappoint him in that regard. I support public ownership and see it as the only answer in the long term to the problems in the utility companies.
American companies in particular have bought into the United Kingdom electricity market over the past three years. They now own about 60 per cent. of our electricity distribution and supply companies. The reasons why American companies want to move into Britain are clear. First, British companies represent cash mountains—the money can be siphoned off for use in other, sometimes fairly dubious activities, usually in north America. Secondly, the American firms are fairly fond of our pretty lax regulatory regime. Thirdly, they see Britain as a springboard to the European electricity market at some point in the future.
I should like to make it clear that I am not being a little Englander in criticising the activities of American energy companies, but to me it is as plain as a pikestaff that if the control and ownership of electricity utility companies is concentrated not in Britain but in institutions and individuals thousands of miles away in America, it will be that much more difficult to call those institutions and individuals and to account, to ensure that they act in the best interests of the people they employ and of those to whom they supply electricity.
The American ownership of UK companies that has been taking place over the past three years is merely the latest stage in a process that began in 1989 with the privatisation undertaken by the previous Government. The electricity industry was privatised at rock-bottom prices, and it is almost an exercise in showing how the idea of a sort of people's capitalism, which Baroness Thatcher, the former Prime Minister, evoked, has failed.
Seven million people bought shares in the electricity companies at knockdown prices. Today, only 2 million individuals own shares. The number is still falling and will probably continue to fall for the foreseeable future. Privatisation has not been a form of people's capitalism; in fact, it has meant huge job cuts, attacks on pay and conditions, such as sickness benefits, the greater outsourcing of work, with all that is attendant on that, and huge pay rises for the directors of the privatised companies.
The industry lost 66,000 jobs in nine years, which is about 45 per cent. of the work force. Eastern Electricity, which supplies my area and much of eastern England, has lost 3,000 jobs, while the pay bill for the directors has risen by something like £1.2 million or £1.3 million.
At the same time, the privatised companies have forced employees to bargain in ever smaller units rather than have national collective bargaining. Often the companies have refused to negotiate with full-time union officials, but negotiate directly with lay members to undermine the strength of the unions. That has meant that pay and conditions have been continually attacked through

outsourcing. The inevitable consequence of outsourcing is that work goes to smaller companies that pay lower wages and offer inferior conditions.
The whole process has been and will be exacerbated by the arrival of the big companies with real market power. The Southern Company, for example, which bought SWEB, cut the work force and attacked sick pay entitlement. Incidentally, Southern has an absolutely appalling environmental record in the United States. The idea that our already weak regulatory regime will be able to protect our constituents against the ravages of big companies with market muscle is laughable at best.
Despite all the cuts, the regulator has reduced electricity prices to consumers in England and Wales by only 9 per cent. and in Scotland by only 7 per cent. Price cuts were going to be the one great advantage of privatisation. The idea was that the regulator would be able to reduce prices enormously. In fact, the reductions have been fairly insignificant, or peripheral to everything else that has happened.
At the same time, the regulator cannot even command the supply of electricity. The reality is that since privatisation, thousands of cash meters have been fitted in homes across the country. That means that the number of disconnections has dropped considerably—there are only a handful these days, whereas there used to be 100 or 200 a year. However, if someone cannot afford to feed the meter, he effectively cuts himself off. Therefore, there are still disconnections, although the figures belie that fact.
Eastern Electricity which, as I said, supplies my area, is currently the subject of what looks like a fairly vicious takeover battle between Pacificorp and Texas, two large United States firms. We are now in the absurd situation where jobs, security of supply and people's living standards in eastern England are subject to the whims of a takeover battle that is centred thousands of miles away among individuals and institutions that probably know absolutely nothing about eastern England, and still less about the people whom the company that they are looking to take over supplies or employs.
I have no doubt that both companies regard Eastern Electricity as the cash cow for their activities in north America. I note that Texas has been engaging in some fairly aggressive lobbying since it launched its takeover bid. It wrote to me asking whether I would like to meet the vice-chairman—I have to say that I am not particularly interested in doing so. I understand that it has written to other hon. Members, too.
Texas has a big problem with an old nuclear plant in north America, which it wants to decommission. That would be very expensive, and I am sure that the company intends to divert the cash from Eastern Electricity to America to pay for that decommissioning.
The new management of those companies talks continually about wanting "greater flexibility". The other great refrain is "human resources management". If ever a phrase was worthy of Joseph Goebbels, it is "human resources management". In fact, those phrases mean massive job cuts and the removal of any union or collective representation from the work force, so that the workers can be picked off and kicked when the time is right.
The British electricity industry is now effectively utterly at the mercy of market forces. I cannot see that position changing while we continue to allow the large


companies to dominate the industry. There is another problem on the horizon—the Organisation for Economic Co-operation and Development's multilateral agreement on investment, which means that companies will be able to sue Governments whose laws interfere with those companies' profits.
For example, if a company moved into Britain's electricity supply industry and wanted to burn orimulsion in one of its power stations—orimulsion is the dirtiest fuel on the planet—what would the Government do? The sensible thing, which I am sure that the Government would do, would be to tell the company that it was not allowed to burn it. However, under the OECD's MAI, the company could sue the Government because the prevention of the burning of orimulsion would potentially interfere with the company's profits. Such a case is currently under way in Canada under the North American Free Trade Agreement. The danger is that we are taking that very route.
To my mind, all those problems clearly establish the need for public ownership. The only way that we can make the electricity industry work on behalf of the public is for it to be publicly owned and publicly accountable. Clearly, that becomes increasingly difficult as more electricity companies are owned and run by organisations based in north America. Now is the time for us to move—we should think about taking the companies back into public ownership before the British electricity industry is entirely owned by companies based in north America.
People have often objected to public ownership on the basis of cost, but that argument does not hold water. When the power, coal, rail and steel industries were nationalised in the late 1940s, the Government paid for them in bonds, not cash. There was no huge outflow of money from the Treasury—the Government did not have it anyway—and the bonds were paid for year by year. We could repeat that and bring the electricity industry into some form of public ownership and public accountability, so that it could work for the public good in future generations.

Dr. Ian Gibson: I congratulate my hon. Friend the Member for Hornchurch (Mr. Cryer) on obtaining this Adjournment debate, and thank him for giving me the opportunity to add some brief points at what is an appropriate time for my constituents.
The key issue concerns the two American giants that are buying Energy Group plc, of which Eastern Electricity is a major component. Energy Group is valued at billions of pounds, despite the windfall levy, which we were told would cripple it. Far be it from me to suggest a further squeeze to the Chancellor, but the money might not come amiss and might help to alleviate some of the other problems that we face.
My interest stems from my constituents, who pay money loyally to Eastern Electricity. I, too, pay loyally, although I owe £43; if anyone from the company is present, I should say that the cheque is in the post.
I want to take up the issues that were expressed in early-day motion 710, such as whether the companies that are attempting the takeover have the relevant experience and competence. Massive profiteering is almost certain. I want consumer satisfaction to be met through the

provision of cheaper electricity, not least to pensioners, of whom there are many in my constituency. I also want long-term investment to improve services; Eastern Electricity is to be congratulated on improving its services in Norwich, North after consulting me.
Safety and environmental issues are most important. I do not want nuclear power to act as a substitute for other sources in the attempt to ensure safe electricity production. How will the American companies meet the Government target of a 20 per cent. reduction in CO2, emissions by 2010? Nuclear power is not an acceptable answer.
I hope that the Minister will say something about renewable components in the supply industry. Let us hear about energy efficiency, not share prices. Any Government worth their salt would take care of those factors before allowing such a takeover.

The Minister for Science, Energy and Industry (Mr. John Battle): I thank my hon. Friend the Member for Hornchurch (Mr. Cryer) for securing a debate on these matters, and my hon. Friend the Member for Norwich, North (Dr. Gibson) for his remarks. Some of our debates on energy have not raised the wider questions, so I am grateful to my hon. Friends for the context in which they have set the debate. I appreciate the forthrightness and consistency of my hon. Friend the Member for Hornchurch in calling for renationalisation. I respect his position, but I say at the outset, as he perhaps expected, that I do not agree with it, as I shall explain.
The previous Government' s privatisation programme massively changed the shape of the industry. There are now 63 licensed electricity suppliers, some of which were not traditionally involved in the industry, such as catalogue companies, supermarkets and banks. The shape has changed since the days of the Central Electricity Generating Board, for which my father worked. The industry has been broken into fragments: generation—the range of fuel sources—the distribution and grid system, and the regional electricity suppliers have been separated.
The change and dynamism in the sector have been far greater than was anticipated. Buying back and piecing together the industry would not be as easy as my hon. Friend the Member for Hornchurch suggests, and it is not one of the Government's priorities—it is not on our agenda. We want competition where possible, but regulation where necessary.
My hon. Friend referred to regulation of the industry, which I believe to be of vital significance not only to consumers but to the economy as a whole. Given the impact of the regulated utilities on our lives, work, homes, environment and public services, it is crucial that we ensure that the regulatory relationships are right.
We recognise, for example, that when a licensed utility, such as a regional electricity company, is acquired by another company, whether British or foreign, there may be vertical, horizontal or diagonal integration—water or gas companies buy electricity companies and regional electricity companies break away from the generators. Whatever the merger or takeover, it raises the key issue of regulation, on which we should focus. We want to ensure that any utility can be regulated after an acquisition as effectively as before. My hon. Friends are right to emphasise that consumers should not lose out.
In all mergers, all aspects of United Kingdom public interest, including safety, can be considered under the Fair Trading Act 1973. I want to move on and suggest that there is more for us to tackle. When the Government came to office, we said, on the basis of the preparatory work that we had carried out in opposition, that we were not happy with the regulation regime in place. We believed that the dynamism, the fragmentation and the maelstrom of change in energy markets meant that we had to get regulation right; we did not think that the current system was appropriate.
In opposition, we set up a consultative review of regulation, to determine whether we could get the shapes right to take us through into the brave new world of these changing markets. We said that, in government, we would review the system of utility regulation that we inherited, to set the new shapes that could provide a transparent and accountable regime for the industry in the 21st century.
Regulation used to be rather limited; it was focused on stimulating a market—I think that that was the expression—and introducing competition, and it existed mainly as price regulation. The classic economic definition was narrow; regulation mattered only in getting the price right. The price formula—retail prices index minus X—and driving prices down were emphasised.
We want new elements to come into play. I see regulation as a triangle. At the apex is an emphasis on prices—of course, prices are important; we want a reduction in prices rather than the profiteering that my hon. Friend the Member for Hornchurch mentioned. The triangle has two other corners, however: social obligation and environmental responsibilities. We have a three-pronged approach to regulation, as opposed to a narrow focus on prices.
My hon. Friend mentioned disconnection and pre-payment meters. He was right to say that we did not have to wait for a review of utility regulation to tackle the question of pre-payment meters. In opposition, I shouted from the rooftops about the fact that people were disconnecting themselves because of pre-payment meters, which was why the real toll that they took was not known. People were dying from hypothermia because they did not have fuel to heat their homes in the winter; if they did not have money to put on the cash card, they could not clock up the meter and had to go without energy.
What are we doing now? Now that we are in government, we have already challenged the pre-payment meters and the fact that people who use them effectively subsidise those with direct debit accounts at the top end of the scale. That was a classic case of the poor subsidising the rich, rather than the other way round. We have asked the regulator to move in and ensure that that injustice is not perpetuated.
Social obligations form one corner of the triangle. Another is environmental responsibility. It means that we must match our targets for carbon dioxide emissions, as well as ensuring that the wider responsibilities to which my hon. Friend referred—in connection with safety as well as with the environment—are built into regulation.
That is precisely why we set up the utility regulation review announced last year by my right hon. Friend the President of the Board of Trade. The review is aimed at ensuring open, predictable regulation that is fair to everybody, promotes environmental objectives and sustainable development, and ensures that there are investment incentives.
Why are investment incentives important? I must tell my hon. Friend that they mean, for example, ensuring that companies have the people working for them and invest in keeping the system going. As he may know, there was a debate in January in which some of our hon. Friends asked about wires that had come down in the Norweb area, in Wales and elsewhere, over Christmas.
The question asked was: had those companies stripped and outsourced to such an extent that there were not enough people—that is, enough engineers—to keep the power lines up? The whole purpose of the system is that companies can be regulated under the price formula only if they invest and employ the right-sized work force for the job that needs to be done.
After the review of regulation, we shall produce a consultation document setting out our proposals, which I hope will appear in the near future. It will set out and sharpen our approach to regulation, and set it on a footing that will take us into the future.
Seven of the 12 regional electricity companies in England and Wales are now owned by American companies. That is the right figure for the present, but the Energy Group, which owns Eastern, is the subject of a takeover bid by a United States company. It is important to remind ourselves that it would not be the first time that Eastern has been acquired, because it was previously taken over by the Hanson group.
That merger was considered and cleared under the Fair Trading Act 1973 by the previous Administration, at which time the regulator made several modifications to the conditions of the licence to ring-fence Eastern's regulated electricity activities from the rest of the group.
The ring-fencing is important, because the changes were made to ensure that Eastern would continue to have access to adequate financial and management resources to fulfil its obligations as a public electricity supplier and to maintain standards and the quality of supply. Actions by the parent company that could have prevented that were prohibited. The ring-fencing was set up precisely to ensure that companies could not whisk the money straight across to America without falling under regulation. Otherwise, even price regulation could have been undermined.
The key, of course, is to ensure that regional electricity companies remain within the reach of the regulator. That is why we are examining the structure of the regulatory regime, to ensure that we can insist that that happens. At the time of the bid by Hanson, Eastern was required to trade at arm's length from other group companies, and if the licence conditions are breached, the Director General of Electricity Supply has statutory powers to take enforcement action. In the last resort, the licence could be revoked.
As my hon. Friend said, the key is to ensure that the companies remain within the reach of the regulator and abide by our structure and our arrangements covering price, social obligation and environmental responsibilities.
As for recent bids, in the short time available, I cannot go through the whole history of the bids for Eastern. I know that hon. Members are concerned that electricity companies must have particular duties and responsibilities that follow through from their role in ensuring secure supplies of electricity. Of course, that factor must be considered in any decision about mergers that the President of the Board of Trade has to take in connection with regional electricity company takeover bids.
The director general has proposed that should Pacificorp's bid for the Energy Group proceed to acquisition, he will further strengthen the ring-fencing conditions by inserting additional safeguards against cross-default provisions. As hon. Members may be aware, the director general has published a consultation paper suggesting further modifications to the licences of the public electricity suppliers that have already been subject to takeovers. There is a proposal to require other public electricity suppliers in every case to seek and maintain investment-grade credit ratings, and to prohibit cross-default provisions in any borrowing agreement.
The paper also mentions ensuring that the investment plans are there, and that the people are working in the company to carry the work and the investment forward. That means checking actual investment against the plans and measuring the quality of the service that regional electricity companies provide for their customers. The director general would be able to revoke the licence if the requirements were not met.
Pacificorp has made a bid. I understand that a statement of interest by Nomura, which my hon. Friend raised in early-day motion 710, with my hon. Friend the Member for Norwich, North, has now been withdrawn, and it is uncertain whether the American Texas Utilities is still interested. But it is clear from the press speculation that Pacificorp is still interested, and the question now is whether the shareholders will accept, so I cannot comment.
What we need to be sure of is that if a deal takes place, the assurances agreed between Pacificorp and the regulator on the licence conditions proposed are accepted and respected. The Monopolies and Mergers Commission had several important concerns about the merger originally proposed, but concluded that the licence conditions meant that the proposed merger would not operate against the public interest. None the less, it said that it wanted to stiffen the licence conditions to take that possibility on board.
Among other possible bids is one for the Energy Group by Texas. The company has announced that it is in talks with the Energy Group that may lead to a bid. Were there to be a bid that fell to be considered under the Fair Trading Act, it would have to be treated on its merits in the usual way. I am sure that my hon. Friend understands that I am not in a position to comment in detail on whether such a bid would be approved. The President of the Board of Trade would decide, in the light of the advice received

from the Director General of Fair Trading and of the views of the electricity regulator, whether it should be referred to the MMC.
In formulating that advice, the regulator will take account of any representations received from parties to the merger or from any other third party. That is an important point. It is not only companies that can put in evidence; it is open to any third party to give evidence and say why it does not believe the deal to be in the public interest. That opportunity should be taken more often.
Nomura suggested at one time that it would be interested in a bid, but it seems that it has now stated publicly that it is no longer in talks. I hope that my hon. Friend will understand that it would be inappropriate for me to comment specifically on any particular bid.
As for the multilateral agreement on investment, to which my hon. Friend referred, there was a debate earlier this week, on 23 February, in which the Minister for Small Firms, Trade and Industry spoke at length about it and spelt out the fact that it does not prevent sensible regulation of the environment. Decisions on whether to allow orimulsion or any other fuel to be used would not be affected by that agreement.
I must remind my hon. Friend that it was the present Administration who, when we came to office and were faced with the possibility of an orimulsion plant—in Pembroke, I believe—insisted on a public inquiry before the project could go ahead. I understand that as a result of that decision, the company pulled out of the proposal. So there is no orimulsion plant in Britain now, and I do not know of any current bid for one. Questions were asked at the time and we took the relevant action.
The MAI is not yet settled and there is still work to be done, but we shall press hard for an unambiguous reaffirmation in the agreement of commitments to sustainable development and to core labour standards; for close association of the MAI with the OECD guidelines for multinational enterprises, which are collective recommendations by all the OECD Governments to multinationals on good corporate behaviour; and for strong and binding provisions on not waiving environmental or labour standards to attract particular investments, which is one of the matters on which we shall take a strong line in negotiations. It was our Government who proposed the review of the MAI and its environmental policy, and we shall continue to press on those matters.
The debate has given us a welcome opportunity to hear my hon. Friend's views—

Mr. Deputy Speaker (Mr. Michael J. Martin): Order.

Security Service Files

Dr. Julian Lewis: I am grateful for the opportunity to discuss this subject in the House. I am especially grateful to see the Home Secretary preparing to answer personally on this topic, which is increasingly close to his heart. I have written to the Labour Members in this House and to those in another place whom I propose to mention if time allows, and I am gratified to see that that is one way in which to ensure that the House is not too poorly attended for my oration.
I suggest that we take a trip back in our imaginations to 1945. Let us imagine that the outcome of the 1945 general election had been different and that, as widely expected, the Conservatives had won. Let us imagine that, shortly after that victory, one of their fairly senior figures—a Minister with perhaps not the most spotless reputation—had announced that he was determined that the Security Service, MI5, should destroy all the files on fellow-travellers with Oswald Mosley and the British Union of Fascists. There would have been an outcry—and rightly so—because it is not right for future historians to be denied the opportunity to see what the records say about what people in public life did before—and, I would contend, after—the war, in collusion with or in support of totalitarian, fascist or communist regimes.
How does that relate to today's debate? The answer is, quite simply, that on 22 September 1997, The Guardian published a story about the Minister without Portfolio, headed:
Mandelson wants MI5 files pulped".
The article began:
Peter Mandelson, Minister without Portfolio, yesterday called on MI5 to destroy all files on 'subversives' created during the cold war after receiving an apology from the head of the Security Service over the leaking of details from his own file.
It continued with Mr. Mandelson saying:
'I was not a subversive or a threat to national security—I was a teenager holding ordinary leftwing views'.
He said MI5 should find the resources to 'weed out and destroy' such files, collected during the cold war, 'which are now entirely redundant'.
I was interested in his explanation of his period in the Young Communist League, because it had already been challenged in The Daily Telegraph of 27 August 1997. That article said:
Mr. Mandelson conceded that, 'disgusted' with the Labour Government's support for the Vietnam war, he had briefly been a member of the Young Communist League in the early 1970s.
'It is true that, for a very short period between three and six months, I was a member of the Young Communist League.'
But former political associates of Mr. Mandelson who knew him at the time said he and some friends had actually set up a branch of the Young Communist League after falling out with the Young Socialists.
They also poured scorn on his reason for leaving the Labour Party, pointing out that Harold Wilson's support for the Vietnam war had come in the 1960s and that, by the early 1970s, the party was no longer in power.
I first raised this matter at the tail end of a speech in the defence debate on 28 October, when I pointed out that

it smacked of George Orwell's "Nineteen Eighty-Four" in that the past was being airbrushed. It will be remembered that Orwell's Big Brother state used the slogan:
Who controls the past controls the future: who controls the present controls the past.
I began once again to think that power had gone to Labour Ministers' heads. I therefore wrote to Stephen Lander, Director General of the Security Service, on 16 October—shortly before the defence debate—saying:
I intend to raise this matter in the House of Commons as soon as Parliament returns later this month. So far as I can see, there is no question of inaccuracy in any of the information that was held on Mr. Mandelson's political activities as a member of the Young Communist League in the early 1970s. It is therefore quite deplorable and unacceptable that he should have made his reported demands.
I should be much obliged if you will take the trouble to reassure me that there is no intention on the part of your service to destroy files containing accurate information about Communists and their allies who were active in this country at the height of the Cold War—particularly at the behest of one of these formerly misguided individuals.
The Home Secretary replied on behalf of Mr. Lander in a letter dated 28 October—the same date as the defence debate, but received afterwards. He wrote:
The policy of the Security Service is to retain only those records which it needs to carry out its statutory functions, or which are of historical importance. Files held by the Service are therefore reviewed against those criteria periodically as resources permit. There is no question of consigning whole categories of files for destruction without proper review.

Mr. Alan Clark: The key question is the judgment of what is "of historical importance". The problem is that, almost invariably, that judgment is made by civil servants—although, laughably, Ministers may occasionally try to get something taken out to protect their political reputation. For a historian, the really obstructive thing is when civil servants, to defend their reputation as administrators or having made colossal errors of judgment, weed out or repress things that will reflect badly on them.

Dr. Lewis: My right hon. Friend is an extremely distinguished historian; I am a far less distinguished former military historian and it is precisely from the historian's point of view that I am approaching this matter.
The Home Secretary's letter to me finished:
On the other hand, given the need to ensure that files are not retained unnecessarily the Service will not retain files which do not seem to merit retention on any of the grounds I have mentioned.
On 30 October 1997, 20 Members of Parliament tabled early-day motion 377, which
notes the recent admission by the Minister without Portfolio, that he was active in the Young Communist League when MI5 opened a file on him in the early 1970s; regards as unacceptable his excuse that this amounted to the holding of ordinary left-wing views; deplores his reported demand that MI5 files on Cold War subversives should be destroyed; and urges the Director-General of the Security Service to resist partisan and self-serving political pressure from the Minister without Portfolio.

Mr. Dennis Skinner: As the hon. Gentleman is one of the Opposition's conspiracy theorists, would it not be a good idea to tell us the full story? He is well versed in this matter. He was a spy in Newham Labour party; he was


a fellow-traveller; he infiltrated deliberately to try to expose people in the Labour party; and then the Labour Member of Parliament, Reginald Prentice, crossed the Floor of the House and joined the Tory party. To be honest, the hon. Gentleman should tell us the full unvarnished truth about his own activities.

Dr. Lewis: The hon. Gentleman makes my point for me. If I have my way, my MI5 file—if one exists—will be there so that people can see whether or not what he says is true. That is the irony. Twenty years after my engaging in controversial political activities, my political opponents see fit to bring them up, but, less than that time after controversial political activities in which they engaged, they want to airbrush the record and destroy the evidence of what they did. I thank the hon. Gentleman for supporting my case.
I wrote on 4 November to the Home Secretary to say:
I quite agree with the criteria set out in your letter. It is certainly of historical interest for future historians to know the extent to which people in British public life co-operated with, or espoused the cause of totalitarian, fascist or communist ideologies before or after the Second World War.
I asked the Home Secretary to be more specific about the assurances he was giving me and, on 8 December, he replied. He said:
Files which are destroyed are those which are either no longer required by the Service to carry out its statutory functions or are judged not to be of historical importance or both. There can therefore be no danger of the indiscriminate destruction of files by the Security Service.
As an innocent and virginal Back Bencher, I was taken in by this. On 10 December, I wrote to the Home Secretary and said:
I am grateful for your further letter about the danger of Cold War files being indiscriminately destroyed. I regard your response to my concern as being entirely satisfactory and I thank you for writing back in such a straightforward way.
As far as I was concerned, that was the end of the matter—poor fool that I am.
On 11 January, the front page of The Sunday Times said:
MI5 orders end to spying on political activists.
The report said:
The security service MI5 is to announce an end to spying on activists, radicals and insurgents. In a decisive break with its cold war past, it will destroy tens of thousands of files naming anti-nuclear campaigners, trade unionists and others whose organisations were once considered a threat to national security.
The Guardian, on 12 January, said:
MI5 is speeding up the destruction of thousands of files on individuals it once considered subversive as part of an attempt to modernise".
Evidently, it is now the people's Security Service.
On 15 January, I tabled 12 written questions to ask about the criteria that would be adopted in retaining or disposing of files. Some of the questions were technical and some even went back to criteria used in 1945. I was extremely impressed by the fact that, within five days, I had my answers—although not quite all of my questions were answered. Ten were answered within five days, but a week went by and then another week, and I still received no answers to my remaining two questions.
In the short amount of time I have available—I wish to allow the hon. Member for Lewes (Mr. Baker) to intervene—I shall refer to the two questions. I fear that I shall disappoint Labour Members whom I warned I might be naming, as I will not have time to do so. [HON. MEMBERS: "Shame!"] I will be happy to do so after the debate. The two missing questions were these—one would not have thought that it would take three weeks to answer them. The first was:
To ask the Secretary of State for the Home Department how many representations he has received in favour of the destruction of Security Service files from (a) Labour hon. Members, (b) Labour peers, (c) Ministers, (d) trade union officers and (e) journalists.
The second question was even easier.
To ask the Secretary of State for the Home Department, what representations he has received from the Minister without Portfolio for his MI5 file to be destroyed; and if it is to be destroyed.
One would have thought that these were easy questions to answer. However, it took almost three weeks before the Home Secretary came up with a reply—after I had telephoned his office to remind him I was still waiting. He said:
If I receive any representations from individuals about the possible existence of Security Service files, my practice is to explain the approach of the Security Service to destroying files. It is not my practice to give information about any representations from hon. Members or Ministers or from the other sources listed any more than it would be for me to disclose whether the Service holds or has held files on any individuals."—[Official Report, 3 February 1998; Vol. 305, c. 589.]
I would have thought that, if that were the Home Secretary's position, he could have told me so straight away.
I conclude with three questions. Does the Home Secretary accept that it is of legitimate interest to future historians to know which public figures in politics, trade unionism, business or the media consorted with fascists or communists before or after the second world war? Does he accept that it is important that, if files were improperly held, they should be kept so that the Security Service can be called to account in the future? Above all, does he accept that it is especially important for a Labour Government not to preside over the destruction of files that are likely to show some of their Ministers, hon. Members or supporters in a discreditable light?

Mr. Norman Baker: I shall be brief, and I am grateful to the hon. Member for New Forest, East (Dr. Lewis) and to the Home Secretary for allowing me to intervene. This is a serious matter which I approach from a freedom of information point of view. MI5 is important and necessary, but I would suggest to the Home Secretary that a number of steps could be taken, in line with the Government's commitment to freedom of information, which would enable the matter to be progressed in a manner consistent with Government policy.
First, we do not know whether there is a file on the Home Secretary himself—an allegation that has been made. In a written answer on 4 December, he said:
I have not asked to see, nor have I seen, any file which the Security Service may hold on me."—[Official Report, 4 December 1997; Vol. 302, c. 297.]
In response to a later question, he indicated that there were circumstances in which MI5 was permitted to determine that files were not suitable for ministerial eyes—although


the Home Secretary is responsible for MI5. There is a democratic deficit there. It is up to Parliament to ensure that procedures are put in place to ensure that MI5 is properly accountable.
There are a number of points that the Home Secretary could usefully pursue which will not endanger national security in any way, but which are consistent with the Government's approach to freedom of information. First, why are non-security matters dealt with by MI5 not subject to the Data Protection Act 1988—particularly matters in support of the police? Why is MI5 excluded from freedom of information legislation, when the test of substantial harm could be applied to its activities in the same way as it is applied to anything else? That may well mean that most of what is dealt with by MI5 does not come out, but some might—instead, we have a proposed blanket exemption. Why are the budgets for MI5, MI6 and GCHQ—the Government communications headquarters—shown not separately, but as one figure in the vote?
Why is the number of individuals on whom files are held not published? The Home Secretary has said that he is looking at that matter, and that no security problem is involved in publishing the number of files held on individuals. Why are telephone tap warrants not given out one per line, so we have an understanding of the number of telephone lines being tapped? At the moment, one warrant can cover an organisation such as the Campaign for Nuclear Disarmament, which may involve hundreds of people.
What steps have been taken to improve parliamentary scrutiny of MI5 and the security services? At the moment, insufficient information comes to Members of Parliament, and it is in the interests of the Government and the country that MI5 should be accountable and should be seen to be accountable. That will give more confidence in the Security Service than at present exists.

The Secretary of State for the Home Department (Mr. Jack Straw): The debate presents the House with a useful opportunity to discuss aspects of the accountability of the Security Service, and of myself as Home Secretary for that service.
Security Service investigations usually involve the painstaking collection of information about suspects—whether individuals or organisations—whom the service has reason to believe might present a threat to national security. The information must be recorded carefully and systematically if it is to be of any use in investigations. Consequently, the management of records is bound to be a natural consequence of the service's work.
Since 1989, the Security Service has operated under powers granted by Parliament contained in the Security Service Act. The service's practice of collecting information about people is not one that Parliament has treated lightly. The director general is under a statutory obligation to ensure that the service collects only information that it needs for the purposes laid down in the Security Service Acts of 1989 and 1996—to protect national security; to safeguard the economic well-being of the UK against threats posed from abroad; and, since 1996, to act in support of the law enforcement agencies in the prevention and detection of serious crime.
The hon. Member for Lewes (Mr. Baker) refers to our commitment to freedom of information and to our commitment to greater openness. I am grateful to him for doing so, because we are indeed committed to that.

That is reflected in the publication of the freedom of information White Paper, and will be reflected in the publication of the freedom of information Bill.
The hon. Member for Lewes asked me why the freedom of information Act will exclude the operation of the intelligence agencies. We all recognise, as have successive Administrations, that it is not possible to be open about everything. If we removed the ability of the Security Service to operate in secrecy, we would fatally undermine its capacity to defeat terrorists and spies, who themselves exploit the cover of secrecy. However, as I have told the hon. Gentleman, I believe that we should be prepared to be open about the things that we can reveal without harming the service's capabilities. The service shares that view, and in recent years a great deal of information that would previously have been kept secret has been revealed.
Early on, the hon. Member for Lewes asked me what was the oldest file still kept secret in the Home Office relating to the activities of the Security Service or its predecessors. It turned out that it was a file that dated from 1874. I had that file seriously examined and I agreed that it should be placed in the Public Record Office, following representations. I am grateful to him for that.
However, interestingly, I agreed that, as the file related to the Irish Secret Service, pre-dating the current Security Service, the names of the informants, which were on the file, should be kept secret. Although it is now well over 120 years since the events to which the file relates, given the folk memory in Northern Ireland, if those files were made available, some living individuals could be placed at risk. I am grateful to the hon. Member for Lewes for recognising that.
I believe, as does the service, that the idea of making more information available is right, and I commend the previous Prime Minister and my predecessors as Home Secretary for doing so following the 1989 Act. I am examining, therefore, whether and to what extent it is possible to give details of the number and categories of files held by the Security Service. That answers another question raised by the hon. Member for Lewes. I hope to be able to make an announcement on that subject before the summer recess.
I shall make some general points about the Security Service's file holdings as a whole—

Sir Raymond Whitney: Answer the question.

Mr. Straw: I am answering the question directly. The way in which the service manages its files is described in some detail in the Security Service commissioner's annual report for 1991. The commissioner observed that the procedure for opening a file was strictly controlled. Once a file is open, it is subject to a regime known as "traffic lighting". The reason for that description becomes apparent when I explain that all permanent files are initially given a "green" coding. While a file keeps its green coding, inquiries may be made about the subject of the file.
At the end of the green period, the coding changes to "amber". During the amber period, inquiries about the subject are prohibited, but any relevant information that the service receives about the subject may be added to the file. At the end of the designated amber period, the file is


coded "red". During that period, the service may neither carry out inquiries into the subject nor add substantive information to the file.
Finally, after a period of red coding, the file is microfilmed, the hard copy is destroyed and the entry for the file in the service's central index is transferred from the live index to the research index. Access to the research index is limited, and I understand that it is seldom consulted. For example, it is not consulted in vetting checks.
It will be apparent from what I have said that only a proportion of the service's files are current, in the sense that inquiries may be made about the subject of the files. A substantial proportion of the files are closed. Inevitably, over the years, especially during the long, 40-year period of the cold war, many files were opened and, later, closed. It is worth repeating that no inquiries may be made on the service's closed files unless new intelligence justifies reopening the relevant files within the criteria that I described earlier.
I shall say a few words about one target of the Security Service investigations, which featured in some of the closed files and which was mentioned by the hon. Member for New Forest, East (Dr. Lewis)—those involved in subversion. One of the Security Service's statutory functions is to protect national security from actions intended to overthrow or undermine democracy by political, industrial or violent means. That is what we mean by subversion today, and it is what we have always meant by it.
It happens that our parliamentary democracy is not currently threatened by the activities of subversive groups, but that was not always the case, and it was especially not the case during the cold war. It was concern about subversive activities which led the then Prime Minister, Clement Attlee, to announce the introduction of new vetting processes, designed to deny members of those groups access to sensitive information. That policy was endorsed by all subsequent Governments, and was most recently set out by the then Prime Minister, in a statement in December 1994.
The threat from subversion declined rapidly following the collapse of Soviet communism, and so did the service's work against that threat. The limited resources that the service currently devotes to its counter-subversion function are now focused on monitoring the position, so that it will be able to respond, should the threat resurface.
I shall deal with the central issue raised by the hon. Member for New Forest, East—the policy on the destruction of Security Service files. The Security Service has no wish to retain piles of records that no longer serve any useful purpose. On the contrary, it is the service's policy to keep only those records that it needs to keep, either to carry out its functions or to comply with its statutory obligations. Those include the obligation, which I accept fully, to retain records that are likely to be of historical interest.
As the hon. Member for New Forest, East mentioned, I set out in detail the criteria for keeping records that are regarded as of historical interest in a written answer that I gave him on 20 January 1998. Each file is examined individually and then considered on its merits as a whole as a file, but no collective decision is taken about categories of files.
The examination includes asking whether the file relates to a major investigation; whether questions were raised concerning important subversive figures, terrorists and spies; whether the file concerns individuals involved in important historical events or causes celebres in a security context; whether the file contains original papers of historical interest; whether the file documents major changes of Security Service policy, organisation and procedures; and whether the file is in some way a period piece, illustrating clearly Security Service attitudes or techniques of the time, and milestones in the service's history.
In 1992, following the end of the cold war, the service launched a review of its file holdings, and started to destroy documents that were no longer relevant to its requirements and did not need to be retained for statutory or historical reasons. As individual judgments are made about each file, the process is resource-intensive and has had to compete with the service's other pressing priorities, such as its work against terrorism. More recently, the work has been accelerated, and I hope to be able to inform Parliament before the summer recess of the progress that has been made.
It has to be for the professional judgment of the service itself to decide which files it can safely destroy and which must be retained for operational, statutory or historical reasons. I make it absolutely clear that the service does not, and will not, take decisions about which files to retain or destroy on the basis of representations from outside the service. It would be wrong to do so in respect of private individuals; it would be even more wrong to do so at the behest of hon. Members or, in particular, of Ministers.
Parliament deliberately inserted into the Security Service Act 1989 the safeguard that the service must take no action to further the interests of any political party. Therefore, I make it clear to the hon. Member for New Forest, East that there can be no question of the service retaining or destroying any of its records with a view to securing a party political advantage for any party or any individual, including the Government of the day.
I pay tribute to the men and women of the Security Service, who spend their lives working to protect the citizens of this country from the type of threat that emerged, for example, last year, during the trials of two ruthless terrorist gangs. That work by Security Service staff, whom I have been privileged, in my time as Home Secretary, to meet and get to know, goes on, by and large, out of the public eye. Every one of us has reason to be grateful for what they do on our behalf.
I shall continue to seek opportunities to shed a little more light on the work of the service, but I shall also continue to draw a clear distinction between information that may be disclosed and that which must be withheld in the interests of the effectiveness of the service. We would be failing in our duty to the public if we forced the service to operate—ineffectively—in the full glare of publicity.

It being Two o'clock, the motion for the Adjournment of the House lapsed, without Question put.

Sitting suspended, pursuant to Standing Order No. 10 (Wednesday sittings), till half-past Two o'clock.

PRIVATE BUSINESS

TYNE TUNNELS BILL

Read the Third time, and passed.

Oral Answers to Questions — INTERNATIONAL DEVELOPMENT

The Secretary of State was asked—

Oral Answers to Questions — Bosnia-Herzegovina

Dr. Naysmith: What assistance her Department is providing to Bosnia-Herzegovina; and what plans she has to visit that country. [29610]

The Secretary of State for International Development (Clare Short): My Department has provided more than £400 million of humanitarian and reconstruction assistance to Bosnia-Herzegovina since 1992. I visited Bosnia from 1 to 4 February to review progress.
Our priority now is to strengthen Mr. Dodik's new Government in Republika Srpska, given his public support for the Dayton agreement, and to support and encourage refugee return. I am pleased to announce today additional funding of £1 million immediately in budgetary support for the new Government in Republika Srpska and £1.1 million for refugee return and reconciliation work with the stabilisation force and other partners.

Dr. Naysmith: I thank my right hon. Friend for that reply. Does she agree that the election of the new Government is really good news, particularly with regard to the possible return of refugees and the effect that that may have on implementing the Dayton agreement?

Clare Short: I agree completely with my hon. Friend: this is a massive opportunity to make significant progress in Bosnia. The new Government in Republika Srpska support the Dayton agreement and want to encourage refugee return. If the international community can reinforce that agreement, if people in Republika Srpska can feel the benefits that will flow from the involvement of the World bank, the European Union and Britain, and if the Government do well in the September elections, there is a chance of real progress in returning refugees. We must seize that opportunity.

Mr. Faber: I welcome the right hon. Lady's announcement that further funds will be made available for Bosnia. Bosnia is one of many east European and central Asian countries that currently receive funding from the European Union under the PHARE and TACIS democracy programmes. Can the right hon. Lady confirm that the Commission is currently conducting an internal review of those programmes, the focus of which is to remove funding from the majority of countries that need it most, such as Bosnia, and to reallocate it almost exclusively to the first wave of applicant countries for EU membership—supposedly to assist their accession to the European Union? Is that not a blatant attempt at empire building by the Commission at the expense of the more deserving developing democracies, such as Bosnia? Will the right hon. Lady do everything she can to fight any such misuse of aid during Britain's presidency of the EU?

Clare Short: I agree that the European Union has had difficulty disbursing its funds in the past. The process has

been terribly slow and the programmes have not been as effective as they should. There is now a differentiation between the programmes that will help the accession countries and those that will assist the remaining transition countries. I think that that distinction is sensible because the tasks are different. The task of helping the more advanced countries to adjust to the rules of the European Union is different from helping the less advanced countries, which face terrible problems with poverty and high crime levels and are still only half way to building market economies and democracies. We must differentiate our efforts, but we need to ensure that both European programmes operate more effectively and do not ignore either need.

Oral Answers to Questions — Development Assistance

Mr. Baldry: If she will make a statement on the role of non-governmental organisations in the delivery of development assistance. [29611]

Clare Short: We have strong links with British NGOs which, as the hon. Gentleman knows, are involved in a wide range of tasks supporting development. We also have strong links with community groups and other NGOs in developing countries. We intend to launch a formal consultation on how those relationships can be updated to complement the strategy outlined in the Government's White Paper.

Mr. Baldry: Everyone will welcome NGOs' being more involved in the development of Government policy. Does the right hon. Lady agree that when one considers Britain's contribution to development overseas, it is not just a matter of how much we give by way of gross domestic product; into that account should be put the enormous work and effort of the UK NGOs, which make a considerable contribution to promoting development overseas? For example, the British Red Cross, which yesterday received a new charter direct from the Queen, has done work in northern Turkey with the Kurds and in Angola. Every day, thousands of UK volunteers are working in various parts of the world. Their contribution should never be forgotten when we are considering the contribution that Britain as a whole makes to trying to ensure a fairer world.

Clare Short: I agree with the hon. Gentleman. It matters what we put in as a Government—how effectively we disburse our assistance—but the massive contribution of NGOs shows where the heart and the concerns of the British people lie. There is a long track record of engagement with and concern for people overseas, of support for development and in humanitarian disaster relief. We can be proud of the contribution of our NGOs and we should give them all honour and praise for the work that they have done over the years.

Mr. Dalyell: The House will recollect that at the end of his statement on Iraq yesterday, the Prime Minister referred to the role of NGOs. How does my right hon. Friend see NGOs bringing much-needed help to the people of Iraq, as opposed to the regime?

Clare Short: I have been talking with officials in my Department about how we can make a stronger


contribution to bringing relief to the people of Iraq. The whole world is concerned at their suffering. We know that much of it is the responsibility of Saddam Hussein, but none the less we all feel for their suffering. My Department tells me that the number of NGOs working in Baghdad-ruled Iraq is limited; our capacity to disburse more funds is therefore limited, as there are relatively few people there. I can give my hon. Friend the assurance that we will do everything we can to increase our bilateral assistance to all parts of Iraq and to ensure that, when the oil-for-food swap is increased, we shall do all we can to ensure that relief in the form of food and drugs gets through to the people.

Sir Alastair Goodlad: Further to the point raised by the hon. Member for Linlithgow (Mr. Dalyell) and the Prime Minister's statement, can the right hon. Lady say which NGOs are involved with British citizens and what advice has been given to them in respect of their personal safety in Iraq?

Clare Short: I am sorry; I shall have to write to the right hon. Gentleman. That is foolish, because I was discussing with my officials that very matter and what more we can do, but I cannot authoritatively recall the names of the organisations. I do not believe that there are currently any worries about security, especially after Kofi Annan's great success in getting the Saddam Hussein regime to back down on inspections. I shall look into the question that the right hon. Gentleman raises and write to him.

Oral Answers to Questions — Development Programmes

Mr. MacShane: What recent contacts she has had with the Trades Union Congress about the role of trade unions in development programmes. [29612]

Clare Short: One of my priorities is to secure respect for the International Labour Organisation's core labour standards throughout the world. That is key to ensuring that the fruits of globalisation are fairly distributed, otherwise capital moves around the world chasing cheaper and cheaper labour. My Department is in frequent contact with the TUC to help to achieve that. We are working together on plans for a conference on trade unions, development and human rights, which I hope will generate widespread interest among union members.

Mr. MacShane: I am grateful for that answer. My right hon. Friend has answered my supplementary, so with your permission, Madam Speaker, I shall sit down.

Madam Speaker: Very sensible, too.

Mr. Garnier: Sadly, the right hon. Lady's reply did not answer my question. Can she be more precise? We listened with interest to her answer, but can she give us a little more detail and set out with greater clarity what she meant?

Clare Short: I am always happy to speak at greater length. The hon. and learned Gentleman will know that more and more major British companies are interested in working with my Department, with NGOs and with the trade union movement to get agreement on codes of

conduct for sourcing produce overseas in order to satisfy the pressures from the ethical consumer movements that are growing and strengthening across society. One of the agreements involving people of good will, including employers, trade unionists and NGOs, is that respect for core labour standards—basically, the right of labour to organise, to protect health and safety and not to accept environmental degradation—is one of the fundamental principles of ethical sourcing. We agree with that. We support the work of the International Labour Organisation and we are working with various companies that agree with the principle. I agree with those who hope that there will be a human rights clause in the World Trade Organisation, which would mean basic rights for people worldwide and that capital will not be driven into seeking ever cheaper labour, with all the instability and the race to the bottom on environmental standards that that can entail.

Oral Answers to Questions — Land Mines

Mr. David Marshall: What assistance her Department is providing to reduce the number of active land mines throughout the world; and if she will make a statement. [29613]

Mr. Jim Murphy: If she will make a statement on progress on land mine clearance programmes. [29619]

The Parliamentary Under-Secretary of State for International Development (Mr. George Foulkes): We were all delighted when my right hon. Friend the Secretary of State for International Development signed the Ottawa convention on behalf of the United Kingdom Government. We are doubling our expenditure on de-mining and we are working for greater international co-operation and building up more local capability in order to speed up de-mining worldwide.

Mr. Marshall: My hon. Friend is well aware that the Inter-Parliamentary Union was the first international forum to debate anti-personnel land mines and that it continues to give this issue high priority. What specific plans do the Government have to speed up the clearance of land mines and to help the tragic victims of these horrific weapons?

Mr. Foulkes: I was glad to be present as a delegate when the IPU discussed these matters. I heard my hon. Friend's eloquent speech. I can assure him that we are giving substantial support through the Red Cross, the World Health Organisation and NGOs for victim support, as well as through our bilateral country programmes.
As for speeding up the clearance of land mines, as president of the European Council we are working for much greater co-ordination of our activities. We are having discussions with the Americans and the Japanese. We are also playing a leading role in developing new techniques for mine clearance.

Mr. Murphy: Is my hon. Friend able to confirm that the policy that the Government inherited would have left the world with land mines planted in it for more than 1,000 years? That is what would have happened if the clearance operation had not been speeded up.
Mozambique recently recovered from civil war but found itself much diminished in resources for education and health. What structures and plans do we have to ensure that the dangerous litter of land mines in Mozambique is cleared?

Mr. Foulkes: My hon. Friend is absolutely right. There are land mines in Afghanistan, Angola, Bosnia, Cambodia—Egypt has mines from the second world war—the Falkland Islands, northern Iraq, Laos, Libya and, as my hon. Friend mentioned, Mozambique. There is a huge task to be undertaken. We need to do more, and we will do more in co-operation with other countries to try to remove this scourge, which affects women and children particularly, as quickly as possible.

Mr. Fabricant: I hope that the Minister will pay tribute to the previous Government, who helped to set up the Ottawa convention. Is the hon. Gentleman aware that there are possibly more than 100,000 unexploded land mines in Cambodia and other parts of south-east Asia? Will he tell the House what measures the British Government are taking in that region?

Mr. Foulkes: I can assure the House that we are active in Cambodia. We are supporting the mines advisory group and other groups working in Cambodia.
The initiative for the Ottawa convention came from the Canadians—from their Foreign Minister, Lloyd Axworthy. My right hon. Friend and her Cabinet colleagues, with others, rightly took up the initiative. I was pleased that it was my right hon. Friend, on behalf of the Government, who signed the convention.

Mr. Home Robertson: As my hon. Friend knows, I have done a bit of NGO work in Bosnia. The presence of mines is a genuine worry, especially for people with young families. What progress is being made on de-mining in Bosnia? What co-operation are our authorities receiving from the former warring factions on information about the whereabouts of mines?

Mr. Foulkes: I pay tribute to the work that my hon. Friend has done. I think that he has driven twice to Bosnia with humanitarian assistance, showing graphically how individuals are contributing to the effort there. I can assure him that we are working with the Japanese Government and our own Ministry of Defence. We are doing everything possible by mapping the position of mines and then de-mining as quickly as possible. I am grateful for his comments.

Oral Answers to Questions — Multilateral Agreement on Investment

Ms Drown: What measures she is taking to ensure that the needs and views of poorer developing countries are taken into account during the drafting of the multilateral agreement on investment. [29614]

Clare Short: My Department is working closely with the Department of Trade and Industry, which leads on the multilateral agreement on investment. We are determined to ensure that the agreement does not damage the interests of the poorest countries and are pressing hard for strong

and binding provision prohibiting any lowering of environmental or labour standards in order to attract investment.

Ms Drown: I thank my right hon. Friend for that reply and congratulate the Government on the work that they are doing to ensure that environmental and labour standards are protected. Does she agree that a key element of development programmes is that a Government should be able to control and filter inward investment and that a developing country should be able to protect its domestic industries just as Britain should be able to protect hers?

Clare Short: With respect, I do not agree with my hon. Friend. Most developing countries, especially the least developed countries, need to attract more inward investment. It is not a question of protecting their own investment, which is limited; they desperately want to attract responsible, beneficial inward investment. The multilateral agreement on investment is meant to cover Organisation for Economic Co-operation and Development countries. It is not meant to apply to developing countries. We are concerned to get accession terms that protect their interests should they seek to join and to get a model that will influence the World Trade Organisation's proposed agreement on investment—a model that will cover all countries. The least developed countries desperately need more, not less, inward investment if they are to develop and achieve sustained economic growth.

Mr. David Heath: I am grateful to the Secretary of State for her comments. Does she agree that we are in the latter stages of the negotiations and many people are still not convinced that there will be no adverse effect on developing countries and environmental standards, and that there are binding responsibilities on multinationals, as opposed simply to rights? Will she give a clear assurance that the Government will not sign the agreement—certainly not in April, which was the original target—until they are assured on all those issues?

Clare Short: The hon. Gentleman knows that there is no chance of that now. The American Administration have made it clear—[Interruption.] May I answer the hon. Gentleman's question? The American Administration have made it clear that there will not be a signature by April, so OECD Ministers have to decide whether to extend the time. The British Government have made it absolutely clear that we will not support the agreement unless there are binding provisions on labour and environmental standards. That is our position, and it is the position of many countries. Some of the campaigns about the agreement are misinformed. A regulated system that makes inward investment more secure and draws it in is in the interests of developing countries. There are possible benefits for the whole world in preventing country after country from competing with one other to attract inward investment by lowering environmental and labour standards. Those are now the top issues for the agreement and it will go through only if it secures what is beneficial.

Mr. Dafis: Is not the danger, though, that developing countries will be prepared to take that investment because they desperately need it, even though the conditions that the MAI negotiated between the OECD countries are not


appropriate for them? Is not the whole process in difficulty because of the large number of exemptions that are being negotiated by some countries to protect their local economies? Is not it best to have a proper postponement—about a year—which is what the NGOs, through the World Development Movement, are asking for, so that we can have an acceptable process of developing agreements on investments and trade?

Madam Speaker: I said only a few days ago that hon. Members should ask only one question. There were about three there and a lot of comment.

Clare Short: The World Development Movement's campaign on the agreement is misinformed. It is essential to obtain binding agreements on labour standards and the environment and accession agreements that can protect the proper development interests of developing countries. The British Government are committed to those things and, if we obtain them, they will be wholly beneficial. The suggestion that it is Armageddon now is just wrong.

Mr. Alan Simpson: Is Britain pressing for the inclusion of a clause in the MAI which guarantees the right of developing nations still to impose domestic reinvestment obligations on multinational companies developing in their areas?

Clare Short: As I have already said, the agreement is meant to apply to OECD countries; it is not designed for developing countries. The principle in it is that inward investment should not be treated any worse than domestic investment, and that investment that has come in should not be taken over without proper compensation, for example. We are adding the labour and environmental clauses. I assure my hon. Friend that we are determined to protect environmental interests, labour conditions and the interests of developing countries, and I am confident that without that there will be no agreement.

Oral Answers to Questions — Education Programmes

Mr. St. Aubyn: If she will make a statement on the role of non-governmental organisations in delivering education programmes. [29615]

Mr. Foulkes: The delivery of universal basic education, which is one of our major priorities, is primarily the responsibility of Governments. However, we welcome the involvement of NGOs in the education sector. They have an important role to play in empowering local people to demand quality provision. They are also particularly effective in the education of excluded children, such as child workers, and in adult literacy programmes.

Mr. St. Aubyn: Is the Minister aware that the Project Trust, a successful NGO which, during 30 years, has sent 4,000 school leavers on projects teaching overseas, recently expressed concern that the work of such bodies might be hampered by the increasing cost of a university education for students who might not be able to afford to offer this volunteer work during their gap year?

Mr. Foulkes: We do not fund the Project Trust, but we recognise that it is a worthwhile, character-building

organisation. I understand that the hon. Gentleman went on one of its volunteer programmes, so he eloquently demonstrates what a success it is.

The Minister of State, Foreign and Commonwealth Office (Mr. Tony Lloyd): Oh no he does not.

Mr. Foulkes: I must agree with my hon. Friend since it is his birthday today, on which I congratulate him.
We support voluntary service organisations such as International Voluntary Service and the Voluntary Service Overseas that send volunteers overseas. I was disappointed to see in The Observer on Sunday that there seems to be a downturn in the number of people volunteering to go overseas. We are now considering what can be done to encourage more people to volunteer to help in developing countries.

Mr. Campbell-Savours: My hon. Friend might recall that Labour's policy document on overseas development, "A World of Difference", argued that development studies should be introduced, by one means or another, to the national curriculum. What developments in secondary education has my hon. Friend to report?

Mr. Foulkes: The development awareness working group has been set up. Everyone who was invited by my right hon. Friend the Secretary of State to serve on it has agreed to do so. The first meeting will be on 31 March. I look forward to chairing it and hearing all the recommendations, which I hope will take forward what was included in that report and in our manifesto.

Mr. Ian Bruce: I am sure that the hon. Gentleman knows that many NGOs that work with street children are particularly involved in their education. Will his Department make it easier for British-based NGOs to bid for project funding from his Department to increase the effectiveness of that excellent work?

Mr. Foulkes: I recognise the hon. Gentleman's particular interest in this area and assure him that NGOs, particularly those working and based in developing countries, can apply through our country programmes for assistance. We will give them sympathetic consideration. [Interruption.]

Madam Speaker: The House will come to order. It is too noisy and we can hardly hear each other.

Oral Answers to Questions — Sudan

Mr. Hanson: What discussions she is undertaking with aid agencies regarding refugees in Sudan. [29616]

Clare Short: We are in frequent contact with UN agencies and our partners from non-governmental organisations working with internally displaced Sudanese and refugees in Sudan. Since April 1994, we have provided about £4.8 million bilaterally to support their work. We were the fourth largest donor of bilateral emergency assistance in 1997.

Mr. Hanson: Will my right hon. Friend pay tribute to the many people in my constituency and elsewhere who


are now busily raising money for the aid agencies to spend in Sudan to help alleviate the distress of those refugees? Will she ensure that, as well as providing such excellent aid—she mentioned £4.8 million—she works with the Foreign Office to ensure a political solution by bringing the warring parties back to the table so that refugees can find their way back to their own homes?

Clare Short: I pay tribute to the generous people who collect money for and care about the suffering of the Sudanese people. I agree with my hon. Friend: the real answer for the people of Sudan is a political settlement and an end to the civil war that has resulted in so many refugees and internally displaced people. The destruction of the Sudanese economy is a tragedy for Sudan and that part of Africa. We must do all in our power to support a political settlement.

Oral Answers to Questions — Caribbean

Mr. McAllion: What steps she is taking to promote development in the Caribbean. [29617]

Mr. Foulkes: Caribbean countries have been making great strides in recent years. Our White Paper distinguishes between the needs of the poorest countries, which require resource transfers to develop basic services, and middle-income countries—such as those in the Caribbean—which need access to technical assistance and know-how. We have had two consultations on this matter with Caribbean high commissioners and I had a useful and positive discussion with Caribbean Governments at the recent UK-Caribbean forum in Nassau in the Bahamas.

Mr. McAllion: Cuba is the most important island in the Caribbean—[Interruption.]

Madam Speaker: Order. We can hardly hear the hon. Gentleman who is on his feet. I have already asked the House to come to order and it must now do so.

Mr. McAllion: I was saying that Cuba is the most important island in the Caribbean and I know of my hon. Friend's great interest in Cuba. Does he agree that the best way that Britain can help the embattled people of Cuba in their struggle against the illegal aggression of the United States of America is through constructive engagement by forming closer political ties and building better trading links with Cuba? To that end, will he undertake to become the first Minister to visit Cuba since the Labour Government were returned to power in 1997?

Mr. Foulkes: I would certainly like that opportunity at some time. We already support Cuba through the Department's small projects scheme and through our contribution to the European Community's humanitarian programme. We have been encouraging the Commonwealth Development Corporation to develop an investment programme in Cuba. I have met the Cuban ambassador and visiting Ministers from Cuba and discussed with colleagues in other Departments how we can further our co-operation with Cuba.

Sir Peter Tapsell: Does the Minister agree that, while new forms of development are urgently needed in many

of the English-speaking islands in the Caribbean, any benefits that that development will bring will be overshadowed if the European Union, responding to pressure from Germany, is permitted to destroy the export of their agricultural products, particularly bananas and sugar?

Mr. Foulkes: I was hoping that the hon. Gentleman would raise the issue of bananas and I was not disappointed. I assure him that we are doing everything we can to protect the interests of the Caribbean banana producers. I pay particular tribute to my right hon. Friend the Minister of Agriculture, Fisheries and Food, who went to St. Lucia to see for himself the banana producers' problems. When he then went to the Agriculture Council he was able to speak with first-hand knowledge. Like other Ministers, he has been fighting hard to protect banana producers' interests.

Oral Answers to Questions — Endangered Species

Mr. Baker: What steps she is taking to ensure endangered species are not adversely affected by her Department's policies. [29618]

Clare Short: The White Paper emphasises the central place of the environment in our efforts to eliminate poverty and promote sustainable development. We are clear that the best way forward is to assist poor people to find sustainable livelihoods so that they can improve their lives and sustain natural resources. Every bilateral Department for International Development programme is subject to an environmental screening to ensure that it does not adversely affect endangered species, or the environment as a whole.

Mr. Baker: I agree with the Secretary of State, but may I draw to her attention the fact that there were 80,000 tigers in the world in 1900? Now there are fewer than 5,000, 3,000 of which are in India. Her Department could play a major role in ensuring the tiger's survival. Will she ensure that the global tiger forum is formally convened, and will she also investigate the detrimental impact of the joint forestry management programme with the Karnataka forest department in the western Ghats?

Clare Short: We all want to make sure that the tiger survives, but I remind the hon. Gentleman that my Department exists to work towards eliminating poverty, not just to protect endangered species. Our view is that, if the poor can live in a way that is good for them and sustains their natural environment, that is the way to look after the planet and its people.
The hon. Gentleman referred to forestry. We are working in many areas to give poor people who live near forests some sort of ownership of the future of those forests. That, and technical support, will allow them to sustain their own forests: we will protect the planet and the animals that live in the forest.

Oral Answers to Questions — Montserrat

Mrs. May: When she plans to visit Montserrat to discuss aid to that country. [29620]

Clare Short: I have no plans to visit Montserrat. The hon. Lady may know that the Foreign and


Commonwealth Office has lead responsibility for the dependent territories and for co-ordinating the work of all Departments that assist Montserrat and the evacuees. I am therefore very pleased that my right hon. Friend the Foreign Secretary was able to visit Montserrat recently.

Mrs. May: Does the Secretary of State accept that her decision not to visit Montserrat could be seen by the islanders as a snub? Does she further accept that the Government have lessons to learn from their handling of the issue of Montserrat, not least whether the Department or the Foreign Office is leading? Will she commission a full, frank and impartial report on the lessons that the Government have to learn from their handling of the problems in Montserrat?

Clare Short: No, I do not accept that for a minute. In fact, a junior Foreign and Commonwealth Office Minister and my own junior Minister have visited Montserrat three times between them. The Foreign Secretary has also visited Montserrat, whereas the Foreign Secretary in the previous Government did not. There are 2,800 people left living in Montserrat. My Department has spent £55 million on this complex emergency. We have responsibilities to poor and needy people all over the world. We have done much to improve the efficiency of the administration of Montserrat: we inherited from the previous Administration an inefficient system with many layers of decision making, but we have put much of that right.

Oral Answers to Questions — PRIME MINISTER

The Prime Minister was asked—

Oral Answers to Questions — Engagements

Mr. Evans: If he will list his official engagements for Wednesday 25 February.

The Prime Minister (Mr. Tony Blair): This morning, I had meetings with ministerial colleagues and others. Later today, I shall have further such meetings.

Mr. Evans: Before Sunday's march of 250,000 people through London, will the Prime Minister come to Longridge in the Ribble Valley tomorrow night? I shall be lighting a beacon, one of thousands which will unite the whole United Kingdom and send a clear message on behalf of those who live in and love the countryside. They are fed up and have had enough of the Government's relentless attacks on them. They see their way of life being ruined and, with farming in crisis, the countryside is at risk. Will the Prime Minister tell country people how long and how loudly they need to shout before he will listen to them and give them the help that they need?

The Prime Minister: There is no campaign of greater hypocrisy than the countryside campaign launched by the Conservative party. When the hon. Gentleman lights his beacon tomorrow night, perhaps he will tell people that there are 30,000 more hectares of green belt under this Government. The farming industry is receiving £85 million more of help than under the last Conservative

Government. The problems of farmers are immense, but their main problem is the BSE crisis created by the Conservative Government.

Mrs. Butler: Does my right hon. Friend agree that a House of Lords with more than 750 hereditary peers is indefensible in a modern democracy? Does he look forward to the support of all the other parties for the short sharp Bill to end those peers' voting rights?

The Prime Minister: I certainly look forward to the support of the Leader of the Opposition and the Conservative party for reform of the House of Lords. It is not entirely clear what is happening on the other side of the House, but Labour Members consider it quite wrong that hereditary peers should end up deciding the laws of the land.

Mr. Hague: When the Prime Minister cut lone parent benefit in December—we supported him—did he do so to save money, or because he believed in the principle that the benefits system should not discriminate against married couples?

The Prime Minister: We did not believe that the system should discriminate against married couples, but we believed that putting in extra money to help lone parents to get off benefit and into work—some £300 million more than the Conservatives put in—was the right way in which to spend the public's money.

Mr. Hague: After fighting so hard to bring about that cut in December, why did the Government let it be known this morning that they intend to more than compensate lone parents with hundreds of millions of pounds of extra benefit? Why is the Prime Minister now backsliding on his vow—the vow on which he has staked so much—to reduce welfare spending and tackle welfare dependency?

The Prime Minister: The short answer is that we are not backsliding, and that those stories are wrong.

Mr. Hague: It is no good the Prime Minister telling us not to believe what we read in the press, because we have come to learn that we are far more likely to read Government announcements in the press than to hear them on the Floor of the House of Commons. It is just like last week: we all know a U-turn when we see one.
Is it not the case that, faced with Back-Bench rebels and a grass-roots revolt at Labour party roadshows where people have thrown eggs at the Chancellor of the Exchequer, the right hon. Gentleman's Government have begun to lose their nerve? When the Green Paper is finally published next month, will it at least contain clear targets for the reduction in welfare spending that he has long promised?

The Prime Minister: I am afraid that the right hon. Gentleman formulated that question before he heard my answer, in which I said that the story was wrong. There is no U-turn; there will be no change in the regulations governing lone parent benefit. As for talking about U-turns, I think that, after his constitutional speech yesterday, the right hon. Gentleman is rather unwise to do so.

Mr. Hague: My speech laid out a clear set of principles—a concept unknown to the Prime Minister.


Let him answer my actual question: will the Green Paper, when it is published, contain clear targets for the reduction in welfare spending that he has long promised?

The Prime Minister: I am afraid that the right hon. Gentleman will have to wait for the Green Paper on welfare, but the Government are already carrying out substantial welfare reform—not least in the welfare-to-work programme, a £3.5 billion programme to get our young people off benefit and into work. That programme has been opposed by the right hon. Gentleman and the Conservative party, although it has been welcomed by business and young people throughout Britain.

Mr. Hague: The Prime Minister says that we will have to wait for the Green Paper. We have been waiting a very long time for the Green Paper, which the right hon. Gentleman said would be published around the turn of the year. We do not know around the turn of which year he meant.
The Prime Minister has promised the country that he will reduce welfare spending. Today, on the lunchtime news that he always watches, his Back-Bench rebels have welcomed the news of his U-turn. The right hon. Gentleman knows that he can have the Opposition's support on this issue; so, on this issue, why does he not stop trying to govern the Labour party, and start governing the country?

The Prime Minister: That would have been a great finale if it had not been for my original answer, which was that there had been no U-turn. I am very sorry, but the only party that is serious about welfare reform is this party. The Conservative party had 18 years in which to reform welfare; instead, it left us with a situation in which poverty is up, more children are living in poverty, more pensioners are living in poverty and there are more workless households—yet spending is up. That is a record of failure that we will turn into success.

Ms Jenny Jones: Is my right hon. Friend aware that two thirds of pensioners on income support are women who therefore live out their old age in poverty? As the previous Government did nothing to tackle that problem, can my right hon. Friend assure me that the Government's pension review will give a high priority to the needs of women?

The Prime Minister: We are particularly looking at how we help low-income families and pensioners on low incomes. My hon. Friend will know that, by cutting VAT on fuel, as we promised we would do, and did, and by the additional help this year and next with pensioners' heating bills—£50 for pensioner households on income support and £20 for pensioner households that are not—we are already making sure that we put the priorities of low-income pensioners first.

Mr. Beith: Although it is understandable that the Prime Minister will give a sharp response to the party that has been in charge of the countryside for the past 18 years, during which the problems have built up, does he recognise that the anxieties are serious and deep? Half the villages now have no schools; three quarters of them have no daily bus service; and services such as the health

service and those for the elderly are threatened by cuts which started under the previous Government but which he has continued against the background of a crisis in the countryside's basic industry.

The Prime Minister: Let me first say where I agree very much with the right hon. Gentleman. In relation to the countryside, issues such as health, schools, crime and transport are every bit as important to people in the countryside as many of the things that the Conservative party continually raises. Since coming to power, we have put substantial additional resources via the new deal, the release of capital receipts and extra money for schools into rural areas. It will take time to turn around the mess that we inherited from the Conservative Government. In particular, we need to make sure that we hold firm to tight public spending to get rid of the big structural budget deficit which we inherited on 1 May.

Mr. Beith: Why does it always seem to be the rural areas to which the message is delivered that the cuts must be impacted on them? When it comes to the signal that the Government give to people in rural areas, how is it that the powers of the Rural Development Commission were given to the regional development agencies and the Government set up a social exclusion unit and said that it would deal only with urban problems? Many country people now feel very excluded.

The Prime Minister: That is simply wrong. We do not say that rural areas should be discriminated against. Indeed, that is why I say that the additional money on national health, in relation to schools and in respect of the new deal is going to rural areas as well as inner-city areas. It is essential for us to make sure that we do not lose the tight grip on public finances that is at the heart of removing the threat of boom and bust that we had so many times under the Conservatives, and to make sure that we have prudent, stable economic management for the long term. When we get the public finances sorted out, we can give to rural areas and others the help that they desperately need.

Mr. David Taylor: Is the Prime Minister aware that a warm welcome will be given to today's consultation paper on wider access to the open countryside, especially in areas such as North-West Leicestershire, where so much is closed to us? In view of our disappointing experience over the decades in establishing voluntary agreements, would he care to comment on the need to establish a statutory right of access?

The Prime Minister: We have made it clear that, if voluntary means fail, we are prepared to legislate. It is also right that, if we can, by voluntary means, establish greater access to the countryside, we can obviously have that access far more quickly and far more easily. There is no intention whatever—this again has been subject to some misconstruction—to have people roaming through land that is cultivated or developed. The vast bulk of affected land is open countryside such as moorland to which people would like greater access. If it can be done by voluntary access, so much the better: if it cannot, we stand ready to legislate.

Mr. Wilkinson: Has the Prime Minister had time to read today's letters in The Times, particularly one five-paragraph letter from a justice of the peace, Mr. Wilding, who complains about financial constraints and reductions in qualified staff and courthouses, and another, a rather more dignified and discursive 16-paragraph letter from a learned and noble art connoisseur—the Lord Chancellor—about his state apartments? Which letter does the Prime Minister think that the British public believe better addresses the problems confronting the British legal system?

The Prime Minister: That was not a very wise intervention. The House of Lords Committee that approved the matter that the hon. Gentleman mentions included Conservative peers, who fully supported it.

Mr. MacShane: Has my right hon. Friend seen the remarkable survey by Income Data Services of many small and big business firms which shows that they are adjusting their wages to ensure that they will not be paying below a national minimum wage? Does he agree that the survey shows, first, that the business community is joining the Government in their drive to eliminate the low pay rates inherited from the previous Government, and, secondly, how out of touch the Conservative party is as it continues to defend poverty pay for the poorest of the land—which no business man is willing to support?

The Prime Minister: My hon. Friend is right: the survey is very interesting, and shows that companies are already trying to deal with the low pay of specific parts of their work force. The evidence is that companies are doing so without any ratcheting up of differentials—which was always the criticism made of a minimum wage. I believe that there is no future for Britain as a sweatshop economy, and that a minimum wage is part of any decent, civilised society. I note that the Conservative party has still not told us whether it would reverse the minimum wage legislation that we have introduced. Perhaps, at some point, Conservative Members will tell us.

Mr. Bercow: The Prime Minister will recall saying:
I never try to tell people what to do for their own children.
Does he therefore agree that, if parents vote to keep the Royal Latin grammar school, in Buckingham, their children should be able to receive a grammar school education without further disruption or uncertainty for the duration of their careers at that school?

The Prime Minister: I do not know about the particular circumstances of the hon. Gentleman's school, although I should be perfectly happy to write to him about it. The rules that will apply to that school are the rules that will apply to any school. The rules have been clearly stated in the Government's proposals.

Mr. Pike: My right hon. Friend will know that many people are worrying about the benefits review. Will he take this opportunity to assure them that they are worrying unnecessarily, and that the

Government's main objective in the benefits review is to tackle the failures of the current system and to ensure that we have a better and fairer system?

The Prime Minister: Yes, that is absolutely right. As I made it clear to disabled groups when I met them, we want to ensure that those who are disabled are given the help that they obviously need. The reason for reform is perfectly simple: as I said a moment ago, spending is up, but poverty is also up. There is a consensus in the country that the welfare system is not working. We have now to proceed to the principles of reform, which will be stated in the Green Paper which will be published shortly. We shall then move to the detailed proposals, each of which will be subject to proper discussion and debate. I think that that is the way to proceed with reform.

Sir Teddy Taylor: Is the Prime Minister aware of the problems facing Back Benchers, probably mostly Labour, in coping with representations from groups of people—such as the university students who are outside the House today, the disabled and trade unions representing national savings—who claim categorically that they were shamefully misled during the general election and have since been sold down the river? Although we fully appreciate that there can sometimes be misunderstandings and that people sometimes do not read the small print, would it not strengthen our democracy if an independent body were established—perhaps by extending the powers of the ombudsman—to look into allegations of electoral fraud? Does the Prime Minister not appreciate that—irrespective of who is the Government—if we do not something about it, our democracy will be undermined?

The Prime Minister: First, on student finance, since we said specifically, as, indeed, did the Conservatives, that we would abide by the outcome of the Dearing committee report, I think that it is the richest possible hypocrisy for the Conservative party, having supported those proposals, now to denounce them.
As for electoral fraud, a judgment will be made at the general election. A judgment was made at the last election on the party that the hon. Gentleman supported, and that judgment was pretty resounding.

Mr. Mullin: Has my right hon. Friend noticed that all opinion polls show that the overwhelming majority of country dwellers are opposed to hunting with hounds? Has he also noticed that there is a considerable overlap between the so-called countryside alliance and the bloodsports wing of the Conservative party? Is he aware that many of those who will be attending next Sunday's demonstration will be there not by free will but because they are employed by landowners and fear for their tied cottages and tenancies? Will he bear those points in mind when considering what weight to give to representations made to him by this so-called countryside alliance?

The Prime Minister: Unlike the Conservative party, I certainly believe that love of fox hunting is not the same as love of the countryside.

Mr. Brady: Does the Prime Minister recall the pre-election pledge that he gave to my


constituents that the future of their grammar schools would be decided by local parents? Will he take this opportunity to explain to my constituents why he is breaking that promise by allowing people living outside Altrincham and Sale to vote on the future of our schools?

The Prime Minister: Again, I am not aware of the situation to which the hon. Gentleman refers, but we have not broken any such promise in relation to that situation or any other.

Ms Keeble: Is the Prime Minister aware that most working families in my constituency live on just below average earnings? Is he also aware that the East Midlands legal services committee recently estimated that some 9,000 people in Northampton have serious debt problems? Will he set out the Government's strategy for providing support for working families so that people in my constituency can look forward to a financial future that is more secure than the time they had under the Tories?

The Prime Minister: We want to ensure that we provide greater help and support for working families. Of course, that is one of the issues that my right hon. Friend the Chancellor will address in the Budget. In addition, one of the greatest causes of family poverty throughout the country is the absence of work in households where there should be work. That is precisely why the welfare-to-work programme is so important. It will for the first time give hundreds of thousands of people the chance to get decent skills, a decent education or a job with a private sector employer and allow them to bring a wage into a household that is at present dependent on benefits. I am sure that that is the single best way in which we can tackle poverty in this country.

Mr. Hayes: Is the Prime Minister currently, or has he ever been, personally associated with an offshore trust?

The Prime Minister: No.

Kate Hoey: Does the Prime Minister realise that, among the hundreds of thousands of people at the countryside march on Sunday, there will be many thousands from urban and inner-city areas who care passionately about the countryside? Does he agree that the Deputy Prime Minister's statement this week was greatly welcomed across the country by people who want to see the end of the divide between country and town? Does he share my view that, in view of the hugely divisive nature of hunting, perhaps now is the time to set up some form of independent inquiry—a kind of royal commission—to examine the issues dispassionately and without emotion, while recognising that there are hugely different views on either side of the argument and that people feel very strongly about it?

The Prime Minister: We do not have plans to establish such an inquiry, although of course the debate will go on and people will make their points and raise the issues that are relevant to it. In relation to the countryside and the points that my hon. Friend raises, it is important to point

out that the Deputy Prime Minister's announcement means that the amount of brown-field building and green-belt land will increase. In relation to the real problems that are felt in the countryside, by farmers in particular, again, additional support is being given.
I hope that my hon. Friend would agree that it is unfortunate not only if townspeople are ever ignorant of what is happening in the countryside, but if people who live in the countryside—I speak as someone with a countryside constituency—believe that all townspeople are either ignorant of or dislike the countryside. That is not the case, and attempts to divide town and country are wrong and misguided.

Oral Answers to Questions — Government Policies (Lichfield)

Mr. Fabricant: What assessment he has made of the effects of the Government's policies on the people of Lichfield.

The Prime Minister: In relation to the hon. Gentleman's constituency, I would say, for example, that unemployment has fallen since the general election; that the South Staffordshire health authority is receiving a real-terms increase of £4.3 million for next year, with £1.7 million this winter; and, of course, that the poorest pensioners have been helped with their heating bills. All three things will be of enormous benefit to people in his constituency—and I am happy to give him more particulars.

Mr. Fabricant: I am grateful to the Prime Minister for that helpful answer; I am sure that the whole House will welcome the unemployment rate of 2.8 per cent. Does he accept that some businesses in my area feel that they are at risk and, more important, that the 2.8 per cent. unemployment rate in Lichfield is at risk? There have been five interest rate rises, and the pound has a high value, which means that businesses are facing great difficulties in exporting. More worryingly, the Organisation for Economic Co-operation and Development has reported that the economy—of the whole nation, let alone Lichfield—could go into recession at the end of this year as a consequence. What heart can the right hon. Gentleman give the people of Lichfield, and those from other parts of the country, who voted Labour?

The Prime Minister: I will say exactly what I would tell the hon. Gentleman on the interest rate rises and the management of the economy. As I said earlier, we inherited two significant problems on 1 May in relation to economic management. First, inflation was back in the system, as the Conservative Government had refused to raise interest rates despite being advised to do so. Secondly, there was a large structural budget deficit.
We know what happened when we did not tackle those problems at the end of the 1980s: two years on, we ended up with boom and bust under the Conservatives, 15 per cent. interest rates for a year or more and the largest borrowing requirement that the country has ever known. It is precisely to avoid the dangers of that boom and bust that we have ensured that we have sorted out the public finances and put monetary policy on a sound footing for the long term.
I say to the businesses in Lichfield and elsewhere, and to people in the country, that those measures are tough and difficult, but they are right for the country's long-term future. We shall not shrink from making the long-term decisions necessary to build British economic strength.

Oral Answers to Questions — Ministerial Visit

Sir Robert Smith: When he will next visit the north-east of Scotland.

The Prime Minister: I am afraid that I have no immediate plans to visit the hon. Gentleman's constituency.

Sir Robert Smith: I am obviously sorry that the Prime Minister cannot see the delights of the north-east of Scotland, but I hope that he can tell me the Government's view of the importance of the oil industry to the economy of this country and the north-east of Scotland in particular. Will he send a message to the many small and medium businesses that contract to the industry and are building a very important export market that he wants the industry to thrive and grow, and that they should have the confidence to invest and expand?

The Prime Minister: I certainly want the industry to thrive and grow. The hon. Gentleman will remember that the last Labour Government started the oil industry and put it on its feet. Of course we want both the jobs and the benefits which investment in that industry brings.

Oral Answers to Questions — Engagements

Mr. Syms: Will the Prime Minister now rule out, perhaps by a leak to The Guardian, cutting or taxing disability living allowance?

The Prime Minister: We have made it clear that a review is under way. When the results of that review are published, we will make them available to the House.

Liz Blackman: Can my right hon. Friend confirm the fact that the Government have excellent relations with our European partners, including Germany? Will he join me in roundly condemning the offensive remarks made a few days ago by a Conservative Member?

The Prime Minister: We do have excellent relations with our European partners—[Interruption.] I am sorry that that is a cause for criticism by the Conservative party. I am delighted to see the Leader of the Opposition sitting next to the shadow Secretary of State for Trade and

Industry. I know that the shadow Secretary of State made the criticism that Chancellor Kohl should not be given the freedom of the City of London; perhaps it is time the Leader of the Opposition gave the shadow Secretary of State the freedom of the Conservative Back Benches.

Mr. Whittingdale: Has the right hon. Gentleman had time to study the petition delivered to 10 Downing street, signed by 7,914 of my constituents and calling for the maternity unit at St. Peter's hospital in Maldon to be kept open? Is he aware that the closure of maternity units in rural areas such as Maldon, Braintree, Clacton and Harwich flies in the face of the Government's policy set out in "Changing Childbirth"? Will he intervene to stop such closures, which will deny choice to thousands of mothers?

The Prime Minister: As the hon. Gentleman well knows, the reason for the present tight financial constraints is that we inherited them from the previous Government. What is more, we are putting in an extra £1.5 billion into the national health service. If the hon. Gentleman is going back and telling his constituents that, under a Conservative Government, things would be different, he is simply not telling them the truth—but then what would be new in that for the Tory party?

Mr. Derek Foster: Will my right hon. Friend the Prime Minister join me in congratulating the world-class management and work force of Black and Decker in Spennymoor, which have secured an extra 350 jobs, although the original plan was for total closure of the plant, losing 1,200 jobs? Does he agree that the northern work force has a great deal to gain from lifelong learning strategies, and will he ensure that the Government give as much priority to lifelong learning as to the schools agenda?

The Prime Minister: I am delighted with the news about Black and Decker. I know that my right hon. Friend has worked hard to play his part in helping that investment to come there. Of course, Black and Decker used to be in my constituency.
What my right hon. Friend says about lifelong learning is absolutely correct. As part of the education and skills revolution which we need in this country, we must encourage adults to upgrade their skills and learn new skills throughout their working lives. The imaginative proposals announced today by my right hon. Friend the Secretary of State for Education and Employment, plus additional money to help people get the skills that they require, especially in new technology, will play a big part in boosting jobs and ensuring that Britain is on its way to achieving our aim, our vision, which is to have the best educated, best skilled work force in the western world.

Right to Roam (Consultation Document)

Mr. Tim Yeo: (by private notice): To ask the Secretary of State for the Environment, Transport and the Regions in what circumstances a copy of a consultation document on the right to roam became available to the Ramblers Association before it was available to Members of Parliament, to whom else the document became available, and if he will make a statement.

The Minister for the Environment (Mr. Michael Meacher): The House will be aware that we have published today our consultation document, "Access to the Open Countryside in England and Wales". I held meetings with four national organisations yesterday to outline the Government's thinking in broad terms. In view of the complexity and detail of the issues, I allowed each organisation to have a copy of the document to examine overnight. I emphasised that it was for personal use only and that the contents were not to be disclosed to anybody else.
The organisations concerned were the Country Landowners Association, the Moorland Association, the National Farmers Union and the Ramblers Association, all of which have been involved in extensive discussion with my Department on this issue.
I completely understand the hon. Gentleman's concern that non-governmental organisations should have had copies of the document before it was available to the House. I have discussed this matter with my right hon. Friend the Deputy Prime Minister and apologised to him. [Interruption.]

Madam Speaker: Order. I will have hon. Members keep quiet when an important statement of this nature is being made to the House. I am sorry, Mr. Meacher.

Mr. Meacher: My right hon. Friend the Deputy Prime Minister made it clear that he regarded what has happened as unacceptable, and I share that view. He accepted my wish to make a full and unreserved apology to the House, and that I now do.

Mr. Yeo: I welcome the fact that the Minister has made an unreserved apology, and I was interested to hear his explanation of the circumstances. The facts are these: a policy document was in preparation for months; the timing of its release was entirely under his control; and he chose to give it to four outside organisations a full day before it was available to Parliament—presumably in order to try to buy off criticism in advance.
Does the Minister accept that he should have made a statement about the policy here in the House, so that hon. Members, including those who, like myself, are opposed to his policy, could question him on it? Does he agree that this is further proof of how power has gone to the heads of Ministers? From the Prime Minister—who, characteristically, has not waited in the Chamber to hear this exchange—downwards, Ministers refuse to answer questions in the House, they decline to debate issues in the House, and they refuse even to meet hon. Members to discuss issues of concern to our constituents.
Spin doctors and soundbites may be what the Government depend on, but parliamentary debate is what democracy depends on. Parliamentary traditions have been centuries in the making. Men and women have given their lives for them, yet they are now being consigned to the gutter by the Labour Government. Does the Minister understand that his behaviour is an insult not only to the House of Commons, but to every one of the men and women who elected us?

Mr. Meacher: rose—

Hon. Members:: Resign.

Madam Speaker: Order. We need order in the House for these exchanges.

Mr. Meacher: I have already made it clear that I apologise to the House, and I have to say that, in that rant, the hon. Gentleman has completely overreached himself. The fact is that it is not a policy document; it is a consultation document. In addition, I have already answered a written parliamentary question today.
I should also point out that the previous Government routinely made major policy statements without any recourse to Parliament. One example was the basic pensions-plus document just before the election. It was leaked to the press overnight and published on 5 March at a Government press conference in Downing street, and Ministers refused to make a statement in the Commons. If there is a desire on the part of the House to have a further debate on this document, we shall be pleased to do so.

Mr. Robin Corbett: May I congratulate my right hon. Friend the Minister on doing the honourable thing and coming directly to the House to make his apology? Will he simply confirm that it has long been the practice of Governments to release not only consultation documents, but policy documents on an embargoed basis to interested organisations and the press—including that lot opposite, when they were in government?

Mr. Meacher: I have made my position clear on that. It is certainly the case that the previous Government on many occasions did exactly what my hon. Friend has said. If I am to be condemned, the hon. Member for South Suffolk (Mr. Yeo) and other persons on the Opposition Front Bench should also apologise to the House.

Mr. Charles Kennedy: Given, as the Minister said in his statement, that it was perfectly proper that the request for the private notice question should have been made and then granted by you, Madam Speaker, does he acknowledge that most of us will probably think of the common-sense advice our parents tend to give us when we are growing up—that there are occasions when one should apologise, but there are also occasions when one should, with grace, accept an apology? This afternoon is a good example of that.
Going back to a question by the hon. Member for Vauxhall (Kate Hoey) during Prime Minister's questions, could not this issue and other countryside concerns be addressed by a royal commission, which would enable all


the groups to make their input more openly? It would certainly enable the House to consider and reflect on any legislation which may come forward in due course. It would also give the parliamentary Conservative party the chance to make a more considered response to the document than it managed this afternoon.

Mr. Meacher: I am most grateful for the hon. Gentleman's opening remarks, with which I fully agree. The whole point of a consultation period is that there should be open and genuine consultation of all the relevant parties. I expect the Country Landowners Association, the Moorland Association, the National Farmers Union and the Ramblers Association to discuss the matters fully. They will certainly be listened to with great care before we come to our decision.

Mr. Dennis Skinner: Following some of the requests from the Opposition in the past few weeks as they have launched a campaign against members of the Government for making statements outside this House, I decided to do some research in advance of this statement. Is my right hon. Friend aware that I have already counted 41 occasions during the 18 years of Tory government when requests were made for statements, but the Tory Government had made them on the media? That is 41, and still counting.

Mr. Meacher: I am grateful for what my hon. Friend has said. He is a diligent Member of this House, and is well known for his research. The hon. Member for South Suffolk may, in due course, rather regret raising this point.

Mr. Nicholas Soames: The whole House will have noted with approval the handsome apology made by the Minister. Although what he did was wrong, his coming to the House has been the right thing to do. Does he agree that the House should establish a rule whereby Ministers and Departments are forbidden under

convention and by code of practice to put such documents before other people before they put them before the House?

Mr. Meacher: I listened with great interest to the hon. Gentleman, and I am grateful for his earlier comments. His proposal could be considered, but it is a matter for the House as a whole.

Mr. Nicholas Winterton: The Minister has come to the House with a total and unreserved apology, and the House should accept it. Would you, Madam Speaker, protect the integrity of this House and give guidance to Government—of whichever party—about this practice, and express your view that it should be deplored?

Mr. Meacher: That is a matter for you, Madam Speaker, rather than for me.

Sir Nicholas Lyell: While we welcome the unreserved apology from the Minister, did we not hear him on "Today" this morning, discussing this matter? He said that, unless landowners entered voluntary agreements, there would be legislation. We heard today that there would be full and open consultation of a genuine nature. Which is the truth? Is the former Government policy? If it is, is it not remarkably like bullying?

Mr. Meacher: The two matters are entirely consistent. I would expect someone with the legal and logical mind of the right hon. and learned Gentleman to be able to see that.

Mr. Steve Webb: On a point of order, Madam Speaker. I am concerned that the instance of disrespect for the House that we have just heard is not isolated. When the primary school class sizes money was announced, the information was given to Labour Members the day before other hon. Members, together with a press release for them to send out, and a suggestion that they go to a primary school in their constituency to get the credit for that spending of public money. Do you share my view that that is not in order, and not an appropriate way for the House to proceed?

Madam Speaker: It is a party political matter. It is nothing to do with the Speaker of this House.

International Bribery and Corruption

Mr. Hugh Bayley: I beg to move,
That leave be given to bring in a Bill to create offences of international bribery and corruption; and for connected purposes.
The Bill would make it a criminal offence for a United Kingdom resident or a United Kingdom company to bribe, or attempt to bribe, a public official in another country. It is a serious crime to bribe someone in the United Kingdom, but it may surprise some hon. Members to know that, under British law, it is perfectly legal to bribe someone abroad. It is a case of one law for the United Kingdom and another for the rest of the world.
Not only is bribery legal, as long as the act of bribery takes place offshore, but in some instances it is still a tax-deductible activity. A year ago, I introduced to the House the Overseas Development Co-operation Bill, which sought to target more of our British aid on poor people in poor countries, and to end the scandalous misuse of aid as a sweetener for arms sales, such as that which took place in the case of the Pergau dam.
Now those principles have been reflected in the Department for International Development White Paper, "Eliminating World Poverty: A Challenge for the 21st Century", and, since the 1997 general election, both the European Union and the Organisation for Economic Co-operation and Development, with support from our Labour Government, have adopted conventions against international bribery. This Bill seeks to incorporate those conventions into UK law.
There is a comforting but fictitious belief that bribery is not a serious problem in Britain—that only in the third world is it a way of life. Well, it takes two to tango. The British business man who pays a 20 per cent. commission without asking too clearly where the money goes, is as guilty as the third-world politician or general who pockets the money.
Bribery is a global problem. Only four years ago, Gordon Foxley, a Ministry of Defence civil servant in this country, was gaoled for accepting £1.3 million in bribes.
There is rapid inflation in the currency of bribery. Last year's Mr. Five Per Cent. is this year's Mr. Fifteen Per Cent. or Mr. Twenty-five Per Cent.
In the past, British business has been fairly relaxed about bribery, but no longer. Adair Turner, on behalf of the Confederation of British Industry, told the Los Angeles Times:
Most British companies support the OECD goals.
He also said:
Corruption's become a big issue because it just costs business so much these days.
However, the consequences of international bribery are most serious in developing countries. Corruption can go right to the top. Two former Presidents of the Republic of Korea have been prosecuted and indicted for bribery. A President of Brazil has been impeached on corruption charges.
The sums of money are enormous. In the 1980s, Zaire's foreign debt rose to $5 billion, but the personal wealth of President Mobutu, the country's President, exceeded $4 billion. What was true of Mobutu was true of Ferdinand Marcos of the Philippines or Emperor Bokassa of the Central African Republic.
The problem in some developing countries is not a shortage of capital but the fact that the capital is owned by a tiny elite and held offshore. That money ends up being invested in European and north American property markets and stock markets, instead of in the economic development of those Presidents' own countries.
Bribes—I mean big bribes—are always paid in hard currency, usually directly to an offshore bank account, which robs the developing country of the foreign exchange it needs to promote its development.
The cost of bribes falls primarily on the poor. When a corrupt contractor from this or some other rich country pays a 15 per cent. bribe, he adds that to the price of his contract. His power station or irrigation scheme will cost more, and the little people—those who buy the electricity or the water to irrigate their crops—will pay the price of that bribe. Bribery is a direct transfer of money from the poor to the rich.
According to the EC representative in Kenya, the French contractor who was awarded the contract to build the Turkwel gorge dam—there was no international competition for the project—charged 2.4 times the cost of a comparable dam and power station on the Tana river in Kenya. The Kenyan officials charged with monitoring the contract did not complain because they gained, in the words of the EC official, "high personal advantage".
When bribery takes root, people start buying things that they do not need. Last year, the chief of naval staff in Pakistan resigned amid allegations of bribery in connection with a £580 million purchase of submarines. To Pakistan's credit, the Government have since launched an "Accountability, Accountability, Accountability" campaign—I am glad to see that the rhetoric of new Labour has a global application—designed to root out corruption, and some 85 officials have already been suspended. The Pakistan President estimates that corruption in that country costs the Government 2 billion rupees a day. Many other developing countries—such as Botswana, Uganda and South Africa—take the problem of bribery very seriously.
The International Monetary Fund, which has been the unwitting financier of many big bribes in the past, is now taking a tough line. A "not for public use" document produced in September last year states:
Conditionality will be attached to … safeguard the use of Fund resources.
That may explain why the IMF decided last week not to restore loans to Kenya, because of continuing concerns about the failure of Daniel arap Moi's Government to stamp out corruption.
In 1977, the United States took the lead in combating corruption when President Carter's Administration secured the passage of the Foreign Corrupt Practices Act. It is still the only legislation in the world that makes international bribery an offence. The Act has worked well. It has been used, and it has led to convictions and prison sentences. It has changed the culture of American business.
My Bill seeks to do the same in this country. It is needed because it will be good for business in this country. It is needed because it will be good for international development, and, above all, because it is morally right to put it on the statute book. Politics without morality is the first step towards corruption.

Mr. Michael Fabricant: I congratulate the hon. Member for City of York (Mr. Bayley) on presenting his Bill with such passion and force. However, I oppose the Bill, because I think that it is fundamentally naive, and that it is wrong to introduce such legislation at this time.
The Organisation for Economic Co-operation and Development is endeavouring to find a package of best practice with which to address the problem of bribery around the world. The European Union is also examining that problem at present. However, the House must consider several questions before agreeing to the Bill.
How do we define bribery? If a United Kingdom contractor pays commission to an agent, which is common practice in third-world countries, and that agent passes on some of the commission to those who must decide whether they will purchase the services offered by that contractor, does that constitute a bribe—even though it is once, twice or thrice removed? Would we make it illegal for those companies to give commission? If a company finds that, in order even to be considered for a contract abroad, it must make a percentage contribution to the corporation advertising the contract, would that company also be committing an offence?
It is not by accident that it is not illegal for bribery to be paid to overseas companies from the United Kingdom. If the hon. Gentleman's Bill were enacted, it would probably rule many British companies out of applying for contracts abroad, which would simply fall into the hands of French, German, Japanese, American and other competitors in those countries. What consideration has the hon. Gentleman given to the jobs that would be lost in this country if his Bill became law?
The question of bribery is almost like the question of unilateral nuclear disarmament. Everyone would like the world to disarm itself of nuclear weapons, but Britain and now the Government have resolutely decided that to do so unilaterally would be wrong. I argue that, if the hon. Gentleman's Bill were passed into law, it would be wrong. It would lose valuable jobs, especially in high-tech areas in the sunrise industries in this country.
Although the hon. Gentleman presented his Bill with passion, it reflected an underlying naivety about the way in which business is done in this country and around the world. I say to the hon. Gentleman: wait. His dreams for a bribeless world may well come about. As I said, the European Union is examining the issue, as is the Organisation for Economic Co-operation and Development. As the hon. Gentleman correctly pointed out, the White House is examining the problem. If the Bill is passed now, it will cost jobs in this country. For that reason, I oppose it.

Question put, pursuant to Standing Order No. 19 (Motions for leave to bring in Bills and nomination of Select Committees at commencement of public business), and agreed to.

Bill ordered to be brought in by Mr. Hugh Bayley, Mr. Gerald Kaufman, Mrs. Maria Fyfe, Mr. Peter L. Pike, Ms Diane Abbott, Mr. Charles Clarke, Dr. Phyllis Starkey, Dr. Ashok Kumar, Helen Jackson, Mr. Malcolm Wicks and Ms Rosie Winterton.

INTERNATIONAL BRIBERY AND CORRUPTION

Mr. Hugh Bayley accordingly presented a Bill to create offences of international bribery and corruption; and for connected purposes: And the same was read the First time; and ordered to be read a Second time on Friday 3 July, and to be printed [Bill 128].

GOVERNMENT OF WALES BILL (PROGRAMME)

Motion made, and Question put forthwith, pursuant to Order [15 January],
That paragraph 1(1) of the Order [15th January] relating to the Government of Wales Bill (Programme) be amended by substituting for the words "Ten o'clock on the seventh day" the words "Eleven o'clock on the seventh day; and on that day paragraph (1) of Standing Order No. 15 (Exempted business) shall apply to the proceedings on the Bill for one hour after Ten o'clock.".—[Mr. Pope.]

Question agreed to.

Motion made, and Question put forthwith, pursuant to Standing Order No. 82 (Business Committee),
That the further Report [24th February] from the Business Committee be now considered.—[Mr. Pope.]

Question agreed to.

Report considered accordingly.

Resolved,
That this House doth agree with the Committee in its Resolution.—[Mr. Pope.]

Following is the report of the Business Committee [24 February]:
That it had come to a further Resolution [24th February] in respect of the Government of Wales Bill, which it had directed him to report to the House:
That the Resolution of the Committee reported to the House on 19th January be varied so that—

(a) the sixth and seventh days allotted under the Order [15th January] to proceedings in Committee shall be allotted in the manner shown in the following table, and
(b) each part of the proceedings in Committee on those days shall, if not previously brought to a conclusion, be brought to a conclusion (in accordance with the Order) at the time specified in relation to that part of the proceedings in the third column of the table.

TABLE


Allotted day
Proceedings in Committee
Time for conclusion of proceedings


Sixth day
Amendments to subsection (2) of Clause 118 beginning before line 11 on page 56 of the Bill
6.00 p.m.



Other amendments to subsection (2) of
Clause 118
7.30 p.m.



Clause 118 so far as not disposed of
8.30 p.m.



Clause 119, Schedule 9, Clause 120, Schedule 10, Clause 121, Schedule 11, Clauses 122 to 131
9.00 p.m.



Clause 132, Schedule 12, Clauses 133 to
136, Schedule 13, Clauses 137 to 140
10.00 p.m.

Orders of the Day — Government of Wales Bill

[6TH ALLOTTED DAY]

Considered in Committee [Progress, 3 February].

[SIR ALAN HASELHURST in the Chair]

Clause 118

EXTENSION OF FUNCTIONS

Mr. Denzil Davies: I beg to move amendment No. 374, in page 56, leave out lines 9 to 13.

The Chairman of Ways and Means (Sir Alan Haselhurst): With this, it will be convenient to discuss the following amendments: No. 493, in page 56, leave out lines 10 and 11.

No. 523, in page 56, line 11, at end insert—
'(aa) in paragraph (a), for "or any" substitute "and every", and'.

No. 519, in page 56, line 13, at end insert—
'(d) after paragraph (d) insert—
(f) to promote social equity in Wales.".'.

No. 540, in page 56, line 26, at end insert—
'(e) after paragraph (i) insert—
(j) to encourage the development of exports from Wales.'.

Mr. Davies: The amendment focuses on two aspects. First, there is the insertion into section 1(2)(a) of the Welsh Development Agency Act 1975 of "and social" after the word "economic". For the future, if the clause is accepted as it is drafted, one of the purposes of the Welsh Development Agency—it has to operate through its purposes—will be not merely the furtherance of economic development throughout Wales but the furtherance of economic and social development. That being so, the WDA will take upon itself the purpose of social development as well as and in addition to its present purpose of economic development.
The second focus of the amendment is on the replacement—if the clause becomes law—of the word "industrial" with "business" and "businesses" in relation to the purposes of the WDA. When it comes to the agency's functions, "industrial" is replaced by "business". I wish to consider the definition of "business", which is contained in paragraph 2 of schedule 10 to the Bill. The definition of "business" is important in relation to the replacement of "industrial" with "business".
I shall deal first with the importance of the words "social" and "social development", as I have explained, after "economic development". We are faced with a major change in the function and the purpose of the WDA. It may seem to be a small matter, but it presents a major change.
My right hon. Friend the Secretary of State, in one of his memorable soundbites during the referendum campaign, referred to an "economic powerhouse". Perhaps that was the most memorable phrase of all. The WDA was to be, rightly, after devolution, an economic powerhouse. It was a ringing phrase that sounded well.


However, when we read the clause, we see that the WDA will not be an economic powerhouse. Instead, it will be a "economic and social powerhouse". To my ear, that is not such a ringing phrase as "economic powerhouse". I am not even sure whether a body can be a social powerhouse, but perhaps that is possible. It is clear that something has happened on the journey from the devolution and referendum campaign to this awful drafting of proposed legislation, which always concentrates the mind.
We now have an economic and social powerhouse—in other words, a change or addition to the functions of the WDA. The insertion of those few words—this may seem pedantic—changes the nature of the WDA. I always thought—some of us were in the House of Commons and in government when the WDA was established—that under old Labour, which was very old-fashioned about these things, it was brought into being as a wealth-producing agency or an agency to promote wealth production.

Mr. Richard Livsey: Does the right hon. Gentleman agree that it was a previous Labour Government who introduced the Development Board for Rural Wales, which has social functions? In fact, those social functions stood rural Wales in good stead, and we would have been sore put if we did not have them.

Mr. Davies: I shall refer at length to the debates that took place in the Welsh Grand Committee. These were not on the words "social function" but on the exact words that are to be inserted into the proposed legislation. Again, it was old Labour intervening in the economy.
The Welsh Development Agency was supposed to promote wealth creation. If the changes are carried out, the WDA will have a mixed role. To an extent it will have a contradictory role, not only in wealth creation but in social function or social facilities. There could be problems along that path.
The hon. Member for Brecon and Radnorshire (Mr. Livsey) is right. I take him back to the Development of Rural Wales Act 1976, which applies, until it is done away with, to a small but important part of Wales, Powys, Meirionnydd and Cardiganshire—or Ceredigion—and has been extended, perhaps, to parts of Carmarthenshire. I am not sure. The words "social development" are plain for all to see in that Act. They were taken originally from the Highlands and Islands development board legislation. I do not keep up with Scottish affairs, so do not know what happened to that board. It has probably gone, but whether it exists is immaterial.
There is no definition of "social development" in the Bill, and there is none in the 1976 Act. I do not complain about that; it is not an easy phrase to define. I do not know about the Highlands and Islands development board, as I have not checked. The hon. Gentleman will be interested to know that there was interesting discussion in Standing Committee K on the meaning of "social development". I refer to the Standing Committee debate in 1976, when these matters were debated, and to what was said by my hon. Friend the then Under-Secretary—who represented

Flint, East at the time but who now represents Alyn and Deeside (Mr. Jones). At the time, amendments were tabled to change the wording from "social development" to "social needs". My hon. Friend resisted, saying:
I must resist the amendments and I will explain why. The amended wording could be construed as restricting in some way the activities that the board might support".
These are the important words:
The board should be able to provide facilities"—
social development facilities—
in the form of additional physical amenities such as halls"—
I take it that he meant village halls—
and playing fields, and that explains why the Government are right and the Opposition are wrong. The board should be able to support the activities undertaken in those halls by voluntary bodies"—
indeed, voluntary associations appeared throughout the debate—
if they contribute to the growth and development of the area and enrich its culture.
My hon. Friend continued:
There is no reason why the wording of the Bill should be restricted in a way which would throw doubt on whether the board could assist social activity.
We are approaching some kind of definition, or at least a description. Social development means, quite properly—I have nothing against it—helping village halls and voluntary associations, and assisting in what is called social activity. My hon. Friend said that the definition of the words was taken from the legislation governing the Highlands and Islands development board.
My hon. Friend continued:
A check on any possible and reasonable exercise by the board of the powers"—
there was an argument that the words were too wide and that there should be some kind of check—
to support social development is not to be found in the legal definition of the powers"—
there was no legal definition—
but rather in the need for the consent which the board"—
the Development Board for Rural Wales—
must obtain from the Secretary of State"—
that is, my right hon. Friend until the Bill becomes law and the orders are made—
and the Treasury for any assistance offered".—[Official Report, Standing Committee K, 22 July 1976; c. 82–83.]
Will my hon. Friend the present Under-Secretary of State deal with that specific point? Where will the checks apply in future? My hon. Friend the then Under-Secretary of State properly referred to such checks. He said that there was no check in the legal definition—the courts might check that, and I shall return to that in a moment—but that rather there was a check in the need for the consent of the Secretary of State and the Treasury.
What will be the position when the Bill becomes law and we have an assembly? Will the check, if there is to be one, be transferred from the Secretary of State to the assembly, and will Treasury consent still be required? Will there be no check at all, or will the assembly be some kind of check? That is a subsidiary question, as to how any check will operate on moneys paid for social development, which would include social activity, village halls and voluntary bodies and associations.
On 28 July 1976, my hon. Friend the then Under-Secretary mentioned assistance to rural councils and voluntary service councils—I am not sure what that means. He referred to assistance to the Council of Social Service for Wales. I am not sure whether that still exists. Again quite properly, he referred to assistance to the Welsh Committee—I am not sure what that refers to either—and then to young farmers' clubs. They do a wonderful job in rural Wales. I do not decry any of that at all. But my hon. Friend, who was describing what was meant by "social development", was saying that assistance to young farmers' clubs fell within that phrase, although he seemed to imply that the requirement of the consent of the Secretary of State and the Treasury would be a check.
My hon. Friend then referred to the splendid Association of Welsh Weavers. I am not sure whether that still exists. Perhaps the hon. Member for Brecon and Radnorshire has a Welsh weavers association in his constituency. I hope that he does. I hope that it still exists. If it does, it is surely a worthy body. I am trying to explain what Ministers in the previous Labour Government who introduced the phrase "social development", which is now being taken out of the Development of Rural Wales Act and put into this Bill, understood by that phrase.
My hon. Friend continued:
'social development' is the wider term"—
wider than social needs—
and includes what is suggested as community development."—[Official Report, Standing Committee K, 28 July 1976; c. 196.]
There had been speeches by the then hon. Member for Merioneth about the importance, perhaps rightly, of community development. According to my hon. Friend the Under-Secretary, community development was encompassed by the phrase "social development".

Mr. Livsey: The right hon. Gentleman will agree that the social development work carried out by the Development Board for Rural Wales has been extremely beneficial, and if it is incorporated in the Bill, it will benefit other parts of rural Wales. For example, the development of the Brecon jazz festival and the Hay festival of literature would not have occurred without the DBRW's social development powers. It has created a lot of employment and interest in the locality.

Mr. Davies: The hon. Gentleman is right. The only comment with which I take issue is that incorporation in the Bill would enable those benefits to continue to go to rural Wales. Of course, they would, but the point that I am making is that it would enable the benefits to go everywhere in Wales: to Rhymney or Llanelli—if the hon. Gentleman can have a jazz festival in Brecon, I presume that we shall get the same benefits as his constituents now get.
It would have been perfectly possible for the draftsman to incorporate the phrase in the Bill and confine it to the areas covered by the DBRW. It could have been said that social development should apply to a part of Wales, which could be defined as Powys, Ceredigion and Meirionnydd—the same areas covered by the development board. The hon. Gentleman made a good point. Indeed, he made the point for me. We are extending

a measure that was properly conceived for a small but important area of rural Wales to the whole of Wales: Cardiff, Newport—

Mr. Dafydd Wigley: Will the right hon. Gentleman give way?

Mr. Davies: I appreciate that Caernarfon was not included and that now it will be. I am sure that the right hon. Gentleman is delighted about that.

Mr. Wigley: Does the right hon. Gentleman accept that, during the DBRW's 20 years' existence, several areas of Wales, particularly Dinefwr, Preseli, Glyndwr and Dwyfor, which are just as rural as areas in mid-Wales, argued strongly that they needed the powers that were available to the DBRW, but were not available under the WDA? This change at least meets that agenda.

Mr. Davies: Indeed. Many areas would have liked to be encompassed within the 1976 legislation, and now they will be. Urban areas are now encompassed within the measure, including the middle of some of our towns. Tredegar, Ebbw Vale, Merthyr and Port Talbot will all now be able to ask the Welsh Development Agency for assistance for their village halls, jazz festivals or drama festivals, because those are all functions that fall within the phrase "social development".

Mr. Gareth Thomas: I have been listening closely to my right hon. Friend's argument. I hope that he will forgive me for characterising certain parts of it as overly legalistic. Will he accept two points: first, that those concerned with the regeneration of communities appreciate that there is an artificial distinction to be drawn between economic and social development; and, secondly, that the main focus of the enhanced WDA will be economic development? It will be important for the new agency to be enabled to carry out incidental and ancillary functions, including social development in all areas, and remain intra vires, to use a legal term.

Mr. Davies: I am sorry if I am being legalistic, but there is nothing incidental about the phrase "social development". I suppose that it could have been made incidental when the Bill was drafted. Although my hon. Friend might not like to read those legal words, if he bends his mind to it, he might see that "social" is put on the same plain as "economic". It is not incidental in any way. Indeed, interventions by Liberal Democrat and Plaid Cymru Members—is the party still called Plaid Cymru?—show how much they value payments to young farmers' clubs, jazz festivals and village halls, which will now become available, if the funds exist, to anyone in Wales. My hon. Friend may think that a good thing, but this is a major change in the function and purpose of the WDA. When it was established under poor old Labour, it was concerned solely with wealth creation. Now it is moving into the social field.

Mr. Nigel Evans: Does not the right hon. Gentleman agree that changes could have been made to the WDA in the past, had it been thought necessary to include social development in its remit? There is social deprivation in Swansea, Neath, Port Talbot and parts of


Cardiff. If the changes are made, they will get in line along with the rural areas and argue for their fair share of the cake.

Mr. Davies: That is the point. I would not blame them for doing so. I take exception to my hon. Friend the Member for Clwyd, West (Mr. Thomas) chiding me for being legalistic. I am not being legalistic: dozens of voluntary associations will queue up with their tin cans outside the WDA and outside the assembly, because the proposal is a charter for voluntary associations. I do not know how many there are in Wales, but there are many. I tabled a question to my right hon. Friend the Secretary of State for Wales, asking him to list them. He did not know how many there were, but said that he would put a list in the Library. It has not arrived yet—I do not criticise him for that—but the list will be very long.
The Welsh are good at voluntary associations, and we have never had problems with social development—we are marvellous at it. Our problem has been with wealth creation. It is no good my hon. Friend chiding me for being legalistic. The Welsh economy is not the strongest in the United Kingdom. It may suffer considerable problems over the next year or two as a result of factors outside its control.

Mr. Bernard Jenkin: Monetary union.

Mr. Davies: I do not even include that. Other, global factors could cause problems.
The Welsh economy needs wealth creation. Conservative Members may argue that the WDA was interventionist and old Labour, which believed that Governments should help with wealth creation. Such views are unfashionable these days, but that was the agency's purpose. We all agree with social development, but it is dangerous to mix it with wealth creation. That is my first point about the change to providing for social development.
I do not know where the money will come from. My hon. Friend the Minister might tell me that the WDA budget will be expanded, but if its purposes and functions increase and the sum of money provided stays the same, something will have to be cut, I do not know what. There will be considerable pressures on the WDA, from voluntary associations, for example. The WDA will be responsible to a democratic assembly, not to the Secretary of State, who will not have the economic powers that he holds at the moment.

Mr. Oliver Letwin: Does the right hon. Gentleman agree that the Welsh Development Agency will still depend on the Secretary of State in one respect, that is, the extent of its borrowing powers?

Mr. Davies: That may or may not be the case, but the budget will be determined by the assembly. We shall have an Athenian-type assembly that will want to obtain as much money as it can. If it can tell the WDA that its functions include building village halls, it will do so. There will be considerable pressure to cut back on economic development, as we shall all be pressing the WDA for money for social development.
It may be said that that is only incidental, and that there will be judicial reviews. I am sorry to talk about lawyers again. Sadly, local authorities are becoming fairly accustomed to people saying—understandably—"You have powers to help dyslexic children, or to provide speech therapy. You are not exercising those powers properly." They take local authorities to court on those grounds, but the courts usually say that, if there is no money, authorities cannot provide such facilities. That might well be the case with the WDA, but there will be pressure through the courts and the political system. I urge my hon. Friend the Minister to think again. It is perfectly possible to confine social development to the areas to which it is currently confined.
The other aspect that concerns me—in fact, the two aspects must be considered together—is the replacement of the word "industrial" with the word "business". I shall not be "old Labour" on this occasion, and say that we must keep the word "industrial". There is no great magic in a definition of the word, which has been used for centuries in Britain and France to cover all sorts of activity. I do not object to the change from "industrial" to "business"; indeed, I can see that it makes sense in the world we live in. What worries me is the extraordinary definition of "business" in schedule 10.
Paragraph 10(2) gives that definition. I welcome the fact that there is a definition, for a change, and I suppose that "business" is not an easy word to define. The draftsman starts perfectly sensibly, saying that "business"
includes any industrial, commercial or professional activities".
I do not object to that. Solicitors and accountants in Cardiff who will receive large fees from the WDA will now be able to obtain other forms of assistance from it. I do not object to "professional activities" in the modern world: wealth can be created through them.
The definition continues, however, with the words—in brackets—
whether or not with a view to profit".
The draftsman clearly felt that a business is normally carried out with a view to profit, whether or not it achieves that profit—but not, it seems, in the new WDA. Profit does not really matter. It seems that someone engaging in a professional activity without a view to profit can now obtain money from the WDA. That is a strange and unnecessary extension of the functions and purposes of the agency.
I have asked myself what sort of organisation would conduct a business without a view to profit. I hate to mention it, but I suppose that the Welsh Rugby Union could be said to be conducting a business nowadays. It has sponsorship and money; it is engaged in business activities, but certainly not with a view to profit, on or off the rugby field. Some organisations could describe themselves as businesses, but without a view to profit.
Why on earth do we need that provision, given the purposes and effect of the WDA? The WDA is there to foster wealth creation. I am sorry if this is another "old Labour" view of the world, but what the Welsh economy needs is profit, and lots of it. Let us tax it by all means, but let us have it. We have very little of it; that is the problem.

Mr. Wigley: My constituency contains a village co-operative called Antur Waunfawr, which is not geared to making profits. It employs people with learning


difficulties who would not otherwise obtain work, and it supplies commercial goods. Surely that body could legitimately be aided by the WDA.

Mr. Davies: That is a legitimate body, but my question is whether it should be mixed in with a body such as the WDA, whose ostensible purpose is to create wealth from a profit base in the Welsh economy. I understand that that is an old-fashioned view, but perhaps the legislation is a kind of third way—capitalism with a human face. The Welsh economy needs commerce, industry and professionals, all of them producing profit. There is always a place for the sort of community activity that the right hon. Gentleman mentions, and it is good to see it, but as I say, I question the sense of mixing it in with an economic powerhouse, which is what the WDA was supposed to be, although it will not be any more.
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Not only does the schedule mention activities that are carried on without a view to profit, but it refers to
the activities of any government department or any local or other public authority".
The whole range of government, including quangos, public authorities, non-governmental bodies, voluntary bodies and those that do not make profits are included. Everything is to be thrown at the WDA. Local authorities will be able to ask the WDA for money. Even Departments will be able to do that. The idea is bizarre. Will the Treasury ask for some of its money back? All those bodies will be like bees at the honeypot of the Welsh Development Agency, poor thing. Apparently it will be entirely different from what it was before.
Perhaps the WDA's budget will be doubled, and that is fine, but I question the effect of what is proposed. Despite the criticisms of some of my hon. Friends, the WDA has been a successful interventionist body and has helped to create real wealth in Wales. We need more of that, but perfectly enlightened social activities are to be mixed in, and that is dangerous. I hope that the Minister will deal with those issues, which I hope will not be a by-product of the DBRW and WDA merger. That is not necessary, and the matter could have been ring-fenced in the legislation. I hope that the Minister will explain that matter, which is important for our constituents.

Mr. Evans: I should like to speak to our amendment No. 493 in this group, and I welcome the opportunity to focus on the extension of the Welsh Development Agency's functions, the possible impact on Wales and the potential for the greater devolution of the social role. I enjoyed the speech by the right hon. Member for Llanelli (Mr. Davies). He said that he thought that the WDA would be an economic and social powerhouse. For a second, I thought he said that it would be an economic and socialist powerhouse. However, I understand that we are all new Labour now, so that could not possibly be the case.
The WDA, which was set up in 1976 by a previous Labour Government, is one of the great success stories of Wales. In a recent debate, the Attorney-General said that he had had the privilege of setting up three bodies in Wales that had survived 18 years of Tory rule. He said that they had survived because the Conservative party could not think of anything better. That was a tribute to

the Attorney-General, although it came from himself. It seems that the new Labour Government can think of something better.
The WDA has been built on by successive Secretaries of State for Wales, but there is a fear that the proposed changes may endanger its success. Its remit has been prescribed and the Development Board for Rural Wales has taken over a similar, but more targeted role for areas such as Ceredigion, Meirionnydd, parts of Powys and swathes of rural Wales. That will end with the fusion of the Land Authority for Wales into one super-quango.
We should not underestimate the real success story of the Welsh Development Agency. I think that the right hon. Member for Llanelli fears that the proposed changes will jeopardise the wealth creation focus of the WDA, which, in the 1980s, played such an important role in helping to restructure the traditional industries of coal, slate and steel in parts of Wales, especially steel in Llanwern and Port Talbot.
The Welsh Development Agency also met the task of land reclamation with gusto. I am sure that it would have tackled the task with even more gusto if it had had a larger budget. The WDA also worked on town developments, which were praised by the right hon. Member for Llanelli.
The Welsh Development Agency has helped to transform Wales, which has loosened its grip on its industrial past to become the enterprise centre of Europe. We fear that that role may be jeopardised by changes that will occur under the assembly.
I congratulate the chairman and the entire team of the Welsh Development Agency on its success. We can tell how good the agency has been by the fact that it is being copied not only in other parts of Europe, but across England. The new challenge will be posed by regional development agencies in England—which will receive the help and advice of secondees from the WDA, which is another enormous compliment to their skill.
Another fear is that the Welsh assembly and its 60 politicians may become overly intrusive in the agency's daily affairs. I seek assurances from the Secretary of State—

The Secretary of State for Wales (Mr. Ron Davies): indicated dissent.

Mr. Evans: I see him shaking his head. I am partly reassured by that, but perhaps, later in the debate, we shall receive a bit more—verbal—reassurance that that will not be the case. I am sure that he has taken heed of the fears expressed by the Confederation of British Industry about the lack of a clear demarcation between the assembly's strategic role and the performance of the WDA's daily functions.
This group of amendments seems to propose assigning many extra tasks to the Welsh Development Agency. Some hon. Members have been critical of the agency, saying that it did not pay due regard to areas outside the M4 and A55 corridors, which have acted as investment magnets. However, if we get the changes to the agency wrong and those areas no longer attract the same investment levels—for example, 20 per cent. of all inward investment into Britain has been in Wales—and if those changes divert the agency from its core responsibility, damage will be done not only to the areas along the M4 and the A55, but to other areas that had planned on


gaining some of the extra social development funding. Those areas will be badly let down, particularly if new investment does not materialise.
If we get the changes wrong, the social deprivation that will be caused in parts of Wales—north, south, east and west—will be absolutely enormous, and the tin can that the right hon. Member for Llanelli mentioned in his speech will most certainly find its way to the agency, to the Welsh assembly and to local authorities. We must fully consider the exact consequences of what we are asking of the WDA.
The steer that was given to the WDA—asking it to concentrate on areas away from the M4 and the A55—was absolutely right. The 1996–97 figures show that of £2.2 billion of indigenous and inward investment and 18,400 new and safeguarded jobs, 6,200 of those jobs were safeguarded or created outside the eastern M4 and the A55 corridors. That is absolutely right, and it is exactly what we wanted. The same is true of the Development Board for Rural Wales. We wanted to ensure that more of its money and job creation activities went to a wider area within rural Wales, and that was starting to happen.
New regional development agencies are being created. Despite the concordats that we have heard so much about, we are still unsure about what will happen to Wales's success story when Wales has to compete with those RDAs and with Scotland. Who will be the umpire?
Other problems that will confront not only Wales, but other parts of the United Kingdom are the minimum wage, Europe and farming. Farming is a particular problem for rural Wales, and the WDA will have to pick up the pieces of the crisis that has hit Welsh farming. However, it is not only farmers who are being hit, but the small rural businesses such as tractor suppliers, builders and many others which have grown up around farming. They will now have to look to the WDA. Many small towns and villages will also have to ask the WDA for extra assistance. The greatest social development assistance that can be given to any community is to ensure that there is proper, sustainable work. Without that, there will be severe problems.
Businesses have been hit by five interest rate rises since 1 May. They are probably already working on tight margins and have now seen their borrowings increase and their charges go up. Those which were already marginal may have gone bankrupt.
We have to re-examine the whole subject of Europe if there is to be any re-evaluation, as we understand there is, of the way in which regional aid will be doled out strictly according to the unemployment figures. In many parts of Wales, the unemployment figures are looking good, but we are still told that the gross domestic product of communities in Wales is low compared to many other areas, especially areas in Europe.
We could find ourselves in the absurd situation of seeing areas such as Catalonia attract regional aid that would be taken from areas such as Wales. That would mean a £1 billion hole which the WDA would be asked to fill. We seek some assurances from the Secretary of State in that regard, although I expect that he is battling hard to ensure that any changes in Europe will not disadvantage the parts of Wales that have benefited greatly from regional aid.
I am sure that there is a reason for the way in which social development assistance was targeted on certain rural areas, and a reason why the work was not given to the WDA. If the three bodies to which I have referred are to be merged, we must ensure that social development assistance continues to be given to the parts of rural Wales that need it. The right hon. Member for Llanelli suggested that one way in which to do that would be to include in the Bill more specific references to social development areas. Another way might be to involve local authorities.
As the Minister knows, I was a county councillor in West Glamorgan for six years, and one of my joys during that time was to sit on one of the grant committees. The right hon. Member for Llanelli wondered how many voluntary bodies there are in Wales—I can tell him that there are a great many. They used to ask our committee for support month after month, and we used to dole out money for various bodies. Mention was made of the young farmers, but we gave money to the cubs, boys bands and others. All organisations have a voluntary body to assist them, especially those involving young, disadvantaged and disabled people. We used to go through our budget, which was small in relation to our other budgets, doling out what money we had to assist those good causes.
In the spirit of devolution—and in anticipation of the development of the partnership council—more power could be devolved from the new super-quango WDA to local authorities, particularly if resources are to be limited. Money could then be allocated to the areas that currently enjoy social development status.
I hope that the Minister will closely examine the role of the 22 local authorities, which know their own areas well. If the Government do not carefully reconsider their proposals, they will throw out the baby with the bath water. The WDA's capacity to create wealth could be jeopardised; it will have to fill up the holes created by the other problems that will arise. Social development money will be given to Swansea, Port Talbot and Neath, for example, where there are areas of deprivation that will require money. The WDA will spend so much of its time looking after them that it may ignore rural areas of deprivation.

Mr. Ted Rowlands: All of us who were at the birth of the Welsh Development Agency will naturally wish to scrutinise any recasting or revamping of its role such as is proposed in the clause. That is partly because we feel a sense of parenthood, but mostly because we believe that the agency has a fundamental role to play in the regeneration of the community. Having read the clause and discussed the amendments, I ask a simple question: will the changes create an enhanced WDA that is capable of doing more and better for communities such as the one I serve?
The clause recasts the agency by amalgamating it with other organisations. It also goes further, however, and I hope that the Minister will say whether the redefining of the agency's role and objectives is consequential on the amalgamation, or whether the agency is expected to play a different, wider and more significant role in the context of a Welsh assembly.
I hope that this does not sound like counter-bidding or, indeed, immodesty, but I think that even the Attorney-General, my right hon. and learned Friend the


Member for Aberavon (Mr. Morris), would concede that I was the inventor of the Land Authority for Wales. As a Minister, I devised the idea and took it through Cabinet Committees. I was able to put the Community Land Act 1975 on to the statute book only after a mammoth session in Standing Committee—the record has only recently been broken—in which we sat from 10.30 am until lunchtime the next day to push the Welsh clauses through. By that time, I was already a Minister in the Foreign Office, so I found myself in a curious position.
As a result, I have always had a fond feeling for the Land Authority for Wales, especially as it was also an early example of the Welsh Office striking out on its own in legislative terms. I do not know how many hon. Members recall the Community Land Act, but in England, the powers were vested in local authorities, so we had contentious debates with Welsh local authorities about the establishment of the Land Authority for Wales.
We managed to establish the authority, and I think that it has served a practical and useful purpose. It is one of the great survivors. The rest of the Community Land Act has all but disappeared, but the land authority has survived. Therefore, I feel some sort of fondness for the organisation.
I make no complaint about the fact that the authority is now to be incorporated into the revised and revamped Welsh Development Agency—except to say that we should not oversell the change. The land authority was doing a perfectly good and effective job on its own terms, and it was one of the rare quangos that did not cost the state anything. It was a wealth-creating, profit-making quango in that one respect.
The land authority is to be incorporated into the Welsh Development Agency, but it could usefully have continued to serve its purpose outside the agency—although I have no reason to believe that it will not do so within the agency.

Mr. Denzil Davies: I hate to carry on reminiscing, but while we are talking about the profitability of the Land Authority for Wales, may I ask my hon. Friend whether he was the Welsh Office Minister who came to me, when I was a Treasury Minister, asking for additional legislation to exempt the authority from taxation on its profits?

Mr. Rowlands: I was not, but I certainly would have been party to the attempt. I think that it was Baroness White.

Mr. Davies: The answer was no.

Mr. Rowlands: The Land Authority for Wales represents a modest practical success story, and I am sure that that should be able to continue under the aegis of the new Welsh Development Agency in the context of the assembly. All I ask of my right hon. and hon. Friends on the Front Bench is that they do not exaggerate the significance of the change. The authority is already carrying out its function, and will simply continue to do so in its revised form.
We have, however, heard many exaggerated claims for the new, revamped Welsh Development Agency. I read one recently, and in the context of the clause and the amendments tabled to it, I ask my right hon. and hon. Friends to what extent it is correct. I refer to the belief

that the combination of a new assembly and an economic powerhouse will somehow create a new political momentum for a Welsh energy policy. I have heard that proposition debated in the context both of the assembly and of the proposed changes to the WDA.
When the provisions were recast, was it intended that in all the changes in the functions of the new, or rather revised, WDA, there would be any new kind of power or responsibility for devising, encouraging or developing a Welsh energy policy? Is that consequential upon the changes? I cannot see that it is.
I am sorry to say that the context in which I most recently read the claim that the changes would lead to a new momentum for a Welsh energy policy came from those who want massively to extend opencast coaling throughout south Wales. I have my doubts, therefore, about whether such a development is really consequential on the changes that we are making.
The key to that side of the policy is what will happen with consents for power stations. Will the power to give consents be vested in the assembly, or will it remain with the Department of Trade and Industry? Will the changes in the clause and the rest of the Bill, including the existence of the assembly, make any difference to who consents to power stations? If there is one instrument that could enable one to, or prevent one from, devising an energy policy, it is the power to give power station consents.
What I am about to say will be in a sort of shorthand form, because I do not really mean it in a pejorative sense. My right hon. Friend the Member for Llanelli (Mr. Davies) was right to ask seriously whether the changes proposed in the clause would dilute or deepen the role of the Welsh Development Agency. As my right hon. Friend asked, will we be setting up even more competitive pressures on its budget, both inside and outside the agency? Those pressures are already there in powerful and significant form, even on the traditional functions that we all agree are central to the agency, but which have become Cinderellas in the context of its changing role, even in its existing form.
I am thinking especially of the agency's derelict land function. My right hon. Friend will know how, when we were in opposition, we had to apply continuous pressure to ensure that the WDA's budget for the derelict land programme was safeguarded and maintained in the face of all the other pressures. Will not the new, enhanced economic powerhouse WDA lead to even greater competitive pressures? Both my right hon. Friend and I have felt that the derelict land programme has become something of a Cinderella programme as the WDA's policy, programmes and budgets have evolved. Will it not continue to be a Cinderella and have to compete with other Cinderellas?
That question is serious. I have a vivid illustration: the Deep Navigation site is tied into millennium money, and we have been begging the WDA to come up with its share of the money. We have often thought that we had got the money, but then question marks have been placed against whether the WDA will budget for it. Even at this late hour, the question mark persists and I hope that it will be erased soon. That is an example of the set of pressures that already exist within the agency, but will not those pressures multiply within the new, revised agency, with the result that the agency's role in the regeneration of


communities such as the one I represent will be diluted and not enhanced? That is a serious question, which requires an answer.
In some ways, I suspect that the redefining of the functions and role of the agency contained in the clause reflects the changes in society and in the Welsh economy—

The Chairman: Order. I have been listening carefully to the hon. Gentleman's speech and he appears to be in danger of making a clause stand part speech. The amendments to the clause are very particularly grouped, and the hon. Gentleman appears to be ranging over them in a way that takes him outside the group that we are discussing.

Mr. Rowlands: I am sorry, Sir Alan. I had not intended to do that. I think that one will find that most of my remarks refer to the alteration in the wording, whereby the word "social" is added and the word "industrial" is changed to "business". I intended to illustrate that in the point that I was about to make when you, understandably, intervened to ensure that I stayed on the straight and narrow.
My point is this: does not redefining the word "business" and excluding the word "industrial", as my right hon. Friend the Member for Llanelli suggests, extend the WDA's role into an area in which the WDA has thus far steadfastly refused to become involved? I do not know whether other colleagues have received representations on this subject, but companies that repair motor vehicles or garages have thought that they could benefit from the WDA. Does the redefining of the role from industrial to business mean that the WDA will now incorporate activities in the service sector, in which it had previously refused to become involved? That is relevant to the amendments, Sir Alan, and relevant to the points that I have put to Ministers.

Mr. Gareth Thomas: Will my hon. Friend accept that there is a real need in Wales to invest in the service sector and the research and development sector? In that respect, why does he not welcome the broader scope of functions of the new enhanced agency in that it encompasses not only industry in the old-fashioned sense, but business in the wider sense?

Mr. Rowlands: My hon. Friend anticipates my final observations on the amendments, because I intend to address the argument concerning the industrial sector versus the service sector, as well as the indigenous versus inward investment argument, which has raged through some of the discussion that the clause has engendered outside the House of Commons.
I said earlier that the wording of the clause reflected changes in society that have already taken place. When preparing for the mighty efforts that we are going to make in respect of the new deal, I found that a portrait of the Merthyr Tydfil county borough now shows that the proportion of total employment supplied by the industrial manufacturing sector has fallen to 26 per cent.—that statistic coming from the heart of a great industrial manufacturing base. The service sector has been growing

as a proportion of the total. My hon. Friend is right to draw attention to the changes, and to the fact that we must accommodate them.
We should not rest the regeneration of local economies primarily on the shifting sands of the service sector. The thing that makes our communities distinctive from service sector communities is our manufacturing role, tradition and skills. I challenge the assumption that one has not only to accept that the WDA should change its role, but to want it to change its role. I do not want it to change its role in one fundamental respect. I would like the WDA to continue to see itself fundamentally as an agency to regenerate the manufacturing sector. The agency can do that in two ways. It can support indigenous local industry—where that exists—and it can encourage major inward investment. I was interested to see the figures for new jobs created in Blaenau Gwent recently, where Tesco and Festival Shopping Ebbw Vale created 300 jobs each. That reflects the incredible changes that are taking place.
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In my area, Halla—despite its problems—is trying to regenerate and rebuild the manufacturing sector by inward investment, as are US CAN, Candy and the St. Merryn Meat company. These inward investments were achieved by a powerful partnership: the Secretary of State for Wales with a regional selective assistance budget and executive functions working with the WDA. While I do not oppose the fundamental role that the new economic powerhouse will have—especially in the development of indigenous industry—I am queasy about breaking up that powerful partnership.
My real worry about the WDA is not that it will not fulfil the tasks it has been given, but that the role it has played in inward investment—which has played a fundamental part in the regeneration of economies such as mine—will be damaged. I hope that my right hon. and hon. Friends can give me the reassurance I seek.

Mr. Wigley: The hon. Member for Merthyr Tydfil and Rhymney (Mr. Rowlands) referred to the fact that he was in at the birth of the WDA. I almost claim the right to have been in at the conception because, in 1970, Professor Phil Williams and I were trying to draft a plan to create such an agency. I am aware that there were many before that who also had ideas.
The WDA was opposed by the then Conservative Opposition when it was created. The Conservatives have seen the light since then, and they understand that bodies such as the WDA can play, and have played, a significant part in development. The creation of the WDA was fought tooth and nail by the Conservatives, who opposed it on Second and Third Reading. The Conservatives learned from experience—as, no doubt, they will learn from a similar experience regarding the National Assembly for Wales in due course. It may take a little longer, given the present generation, but time will tell.

Mr. Robert Syms: Does the right hon. Gentleman agree that when there is strong debate in this place on issues such as the WDA, perhaps because there is opposition and people focus on the clauses, it produces good legislation which stands the test of time?

Mr. Wigley: In that case, the Conservatives should not have voted against Third Reading. However, I take the


point. The WDA has played a significant role in Wales. I am not one of those who knock the WDA. There are shortcomings, and there is not a single body that has not make mistakes at some time. By and large, the overall benefits to Wales have been massive.
I shall now discuss amendment No. 374, in the names of the right hon. Member for Llanelli (Mr. Davies) and the hon. Member for Merthyr Tydfil and Rhymney, and amendments Nos. 523, 519 and 540, which we tabled. Although there is a need for a social dimension in the Bill, I understand the arguments made by the right hon. Member for Llanelli and the hon. Member for Merthyr Tydfil and Rhymney. I believe that the primary role of the Welsh Development Agency, in its new form as in its old, must be the economic regeneration of Wales. It must be about creating job opportunities throughout Wales.
Some aspects of the work of the Development Board for Rural Wales have had a social edge—we heard some examples earlier. I could quote examples such as the provision of television masts, with which the DBRW was able to help in the rural counties of mid-Wales, but for which there was no facility outside that area, so other areas could not benefit. Obviously, if the work of the DBRW is now to be included in the overall work of the new powerhouse agency, there needs to be some function to continue such provisions, in the areas where they are appropriate.
I agree with the right hon. Member for Llanelli that it is fundamental to get the economic emphasis right. What will happen if the focus of the Welsh Development Agency is shifted entirely to trying to respond to initiatives that are not strictly economic? Unless there is work for the communities living in the old towns and villages of the slate-quarrying areas of my county of Gwynedd, as in the old coal mining areas of the valleys of Glamorgan and Gwent and in east Dyfed, we shall have depopulation, an aging population and all the social and economic problems that flow from that. Therefore, the organisation must do a positive job in providing the economic base that sustains social and cultural life and the other aspects of life in those areas.
This has been a useful debate, in which valuable arguments have been made from the Conservative Front Bench. I am glad that among Conservative Members there appears to be a change of emphasis and approach to this issue. Perhaps the Leader of the Opposition is giving a lead in rethinking his policy on devolution. If so, I welcome it.
I hope that when the Under-Secretary of State for Wales, the hon. Member for Neath (Mr. Hain), replies to the debate, he will put to rest the issue of the balance between the agency's social and economic responsibilities. I hope he will tell us that the Welsh Development Agency will have primarily an economic role, and that the social role will facilitate the economic role but not take over from it. It is a question of getting the balance right.
I shall now speak to the amendments standing in my name and those of my hon. Friends. Amendment No. 523 inserts, instead of the words "or any", the words "and every". That may seem a very simple amendment. It refers to the need for economic regeneration to occur in all parts of Wales, not just in the pockets of Wales that have benefited so much recently. I shall not bore the

Committee by repeating our arguments about unbalanced development in Wales. I summarise by saying that, until fairly recently, during the period of Conservative government, the Welsh Office had a strategy that accepted that 80 per cent. of new jobs coming to Wales by way of inward investment went to two small pockets—one around the M4 corridor in south-east Wales and one around the Wrexham-Deeside area in north-east Wales.
I grant that, in March 1997, a month before the general election was called, the Conservative Government had a change of mind—a deathbed conversion—and changed that distribution to 50:50. I believe that the incoming Government have changed the distribution a little more, but the pockets of severe unemployment in Wales are to a large extent outside those two catchment areas.
Development needs to take place so that there are economic opportunities and job opportunities within reasonable travelling distance of every part of Wales. I am not saying that it is possible to have equal development in every town and village—obviously, that would be nonsense—but it is reasonable to expect that there should be a fair range of job opportunities within travelling distance.
In areas such as south-west Wales, in Pembrokeshire and other parts of the old county of Dyfed, in north-west Wales—in my constituency and that of my hon. Friend the Member for Ynys Môn (Mr. Jones)—and in other pockets, there are severe on-going levels of unemployment. The strategy is not yet meeting that challenge. Perhaps the Minister will announce some good news for some of those areas. I hope that there will be a change of emphasis in that direction.
We are seeking to alter the wording in the Bill so that the new powerhouse agency will know from the start that it is not a matter of ensuring that the overall figures for Wales look all right and forgetting the pattern throughout Wales. The agency has a responsibility towards every part of Wales—not just those lucky corners that have done so well recently. Amendment No. 519 would
promote social equity in Wales.
In undertaking its economic responsibilities, the agency must guard against the gulf that can grow between areas of severe social and economic deprivation and those that are doing very well thank you. As I have said, we must strike a balance.
Amendment No. 540 is timely. It deals with encouraging the development of Welsh exports and the interface between the Welsh Development Agency and the rest of the world. I am very much aware of the press reports this week about that issue. Yesterday's edition of the Financial Times referred to the apparent need for the Welsh Development Agency to cut expenditure and overseas staff. The report said that the agency is facing a £3 million cut in administrative costs. The Financial Times states:
After staff costs, the area being targeted for savings is expected to be the 11 overseas offices, where the agency is believed to be considering using Invest in Britain Bureaux".

Mr. Letwin: On a point of order, Sir Alan. I may have misunderstood, but I thought that the timetabling


prevented discussion at this stage of amendments that relate to lines beyond line 11. The right hon. Gentleman is discussing amendment No. 540, which relates to line 26.

The Chairman: Order. The hon. Member for West Dorset (Mr. Letwin) may not realise it, but he is questioning my selection of amendments. The fact is that the amendments are perfectly in order if I have selected them in this way.

Mr. Wigley: I am grateful, Sir Alan. I think that the Minister wishes to contribute.

The Parliamentary Under-Secretary of State for Wales (Mr. Peter Hain): I am grateful to the right hon. Gentleman for giving way. I take this opportunity to deny specifically the Financial Times report. There is no truth whatsoever in the claim that the WDA intends to close its overseas operations, which have played an important role in encouraging investment to Wales under both this and the previous Administration.

Mr. Wigley: I am very glad to hear that. On Monday morning, I met Brian Willott, the chief executive of the Welsh Development Agency, to discuss the implications of the cut—I had heard rumours of them before the story appeared in the Financial Times. Mr. Willott was concerned about having to cut costs by £3 million. I assume that the Minister does not refute the idea that there will be a £3 million cut—it is simply a matter of where it will hit.

Mr. Hain: I do not refute the fact that the Government have asked the three quangos that will join to form the new powerhouse under the WDA to make administrative savings. I am sure that the right hon. Gentleman will agree that we must have an efficient operation. There must be scope for savings among three bodies that performed similar functions, many of which were duplicated.

Mr. Wigley: I am sure that there will be scope for savings—the question is whether it will come from the overheads at the headquarters of those bodies in Cardiff and elsewhere or whether it will come from the administrative budget and undermine the WDA's activities at the sharp end. That matter concerns the agency and hon. Members who represent Welsh constituencies. We want the agency to build on its established track record.
We are aware of the on-going attack on the ability of the Welsh Development Agency to attract overseas investment to Wales. There is constant sniping from certain people outside Wales whose agenda seems to be to pull down the work of the Welsh Development Agency. I realise that Wales has benefited: we have received 20 per cent. of inward investment to the United Kingdom, which is more than "our share". However, we certainly needed it. If there is a feeling in north-east England that Wales is doing particularly well, surely that area should rise to our level rather than trying to pull Wales down. This structure is helping to deliver the goods in Wales. If there are lessons to be learned about attracting inward investment to the north-east or the north-west, I wish those areas the best of luck. However, the Welsh Development Agency must not be shackled.
5.15 pm
I have read and heard of the rumblings in the Department of Trade and Industry, which—even before the advent of the new Welsh Development Agency—is trying to tie up the new super-body and establish a hold over it. That would be a severe disservice to Wales. I ask Welsh Office Ministers to provide some assurances in that regard when they respond to the discussion.
I have tabled parliamentary questions about exports. Encouraging exports is the flip side of attracting inward investment. The creation of the interface and the networks and the generation of faith in the economy that provides the exports can be significant factors in identifying and helping to develop overseas investment in Wales. Manufacturing opportunities in Wales or in other parts of the United Kingdom may be identified and products may be exported to the country of origin or to other parts of the world.

Mr. Evans: The WDA is already doing that to a great extent through "Source Wales". Those activities would be damaged if the WDA pulled back any of its people from abroad, particularly from countries such as Japan. The WDA is doing a good job, but there is a fear that indigenous Welsh companies will suffer.

Mr. Wigley: We must develop the "Source Wales" approach. There is immense untapped potential. Much good work has been done, but there is scope for more. Components imported from Japan, Taiwan and the far east that are used by companies such as LG and ACER could be made in Wales—or at least nearer the source. That would benefit the economy of the United Kingdom in general and of Wales in particular. That area must be developed. Proactive work must be undertaken in countries such as Japan, South Korea and Taiwan to achieve our objectives.
I hope that the WDA office in Tokyo is receiving the full, proactive support of our embassies and other United Kingdom organisations. We must not see the sort of infighting that sometimes occurs—the petty jealousies, the empire building and the desire to take credit for any achievements. It is true that the Welsh Development Agency has done some tremendous work, but it would be hamstrung if it were not working as part of a team. I seek the Minister's assurance that the team approach will continue and that the WDA will receive support from all United Kingdom representative bodies, whether they are embassies, the Invest in Britain Bureau or the DTI.
I received an interesting answer from the Scottish Office when I asked a question about the statutory provisions that enable it and its agencies to help firms located in Scotland to develop export markets overseas. The Minister for Education and Industry, Scottish Office replied:
My Department, through Scottish Trade International, a joint organisation between The Scottish Office and Scottish Enterprise, assists the delivery to Scottish-based companies of support from the Government's Overseas Trade Service, funded by my right hon. Friend the President of the Board of Trade. In addition, Scottish companies benefit from export advice and assistance from Scottish Enterprise on the basis of section 1(a) of the Enterprise and New Towns (Scotland) Act 1990 and from export advice now funded by my own Department under the Industrial Development Act 1982."— [Official Report, 10 February 1998; Vol. 305, c. 147.]


In other words, the Scottish Office has a positive, proactive role which will transfer to the Scottish Parliament to develop overseas trade. That is clearly beneficial.
I asked a similar question of the Welsh Office and the Under-Secretary of State for Wales, the hon. Member for Neath, replied on 10 February. He stated:
Section 1 of the Welsh Development Agency Act 1975 provides the necessary statutory powers for the activities of the Agency. The Agency has a number of initiatives and schemes which assist companies in Wales to develop overseas business opportunities."—[Official Report, 10 February 1998; Vol. 306, c. 156.]
The Minister said that he would arrange for me to have a letter from the chief executive of the agency and for a copy to be put in the Library. Such a letter has not come, nor has it reached the Library, but no doubt it will arrive some time.
From comparing those two answers, I get the strong impression that the role of the Scottish Office has been considerably more advanced than the role of the Welsh Office in developing that trade aspect, and that that is beneficial to Scotland's attempt to attract inward investment. The best of luck to Scotland—I do not begrudge it. The Scottish Office is going out and doing the job. On three occasions during the past two years, I happened to be in places overseas where Scottish Office Ministers had just been, trying to draw in investment. That has helped to create the networks that Scotland needs to attract inward investment.
We need that same proactive approach. Bodies such as the Department of Trade and Industry and Invest in Britain must understand that our agenda is to achieve as advanced a model as the one from which Scotland benefits, not to be reined in because of the agenda that the DTI seems to have.
If the Welsh Development Agency and its successor body are to do the job that we need, they will need resources. I hope that the Under-Secretary will respond to the points made by the hon. Member for Merthyr Tydfil and Rhymney and the right hon. Member for Llanelli about the need for resources to deliver the objectives.
In recent months, we have seen the danger of large-scale projects such as LG, which of course is valuable and worth having in its own right, swallowing up the available resources; resources are not available for other parts of Wales where, by now, there is an even greater need for economic stimulation and job creation. If the new body is to have a chance of attacking the agenda that awaits it, it needs those resources. I hope that some assurance will be given that, although we read in the Financial Times about cuts in resources, adequate resources will be made available.
Finally, as this is our debate about the WDA, I hope that there will be some clarification of the appointment of people who will take over the responsibilities in the new super-body, and what will happen with regard to the senior jobs in the new structure. There is great uncertainty in all the bodies. People in post want to know where they stand. Will they be appointed by existing bodies, or can the appointments be made only after the new body has come into existence? I realise that that is tangential to

the debate, but it all comes together in our amendments. We need a structure in place to develop exports and promote balanced development throughout Wales.

The Chairman: Order. I remind the Committee that this is not the only debate about the Welsh Development Agency. There are several groups of amendments that relate to it.

Mr. Rhodri Morgan: Taken as a whole, the amendments in this group relate to the question of how social, as well as economic, the Welsh Development Agency cum economic powerhouse should be, after the merger with the Land Authority for Wales and the Development Board for Rural Wales.
I shall not reminisce about the period in the mid-1970s, almost a quarter of a century ago, when the three agencies were set up under the previous Labour Government, because obviously I was not there, unlike my right hon. Friend the Member for Llanelli (Mr. Davies) and my hon. Friend the Member for Merthyr Tydfil and Rhymney (Mr. Rowlands), but I recall the period. The curious fact about our debate today about a three-way merger and the terms on which it should take place is that that was also true at the setting up of the WDA.
The WDA was a merger of the derelict land unit, the Welsh Industrial Estates Corporation, which built the factories, and the Development Corporation for Wales, which was the punter-hunter for the body that marketed Wales in England and the rest of the world. It tried to draw companies in to occupy the factories that would be built by the Welsh Industrial Estates Corporation, sometimes on cleared land that used to be covered in slag heaps from the coal mines.
In that three-way merger, probably the same consideration of priorities took place that we are undertaking in debating the amendments. We should not expect the functions of a body on day one of a merger to remain the same over the next quarter of a century. Clearly, the priorities will change. When the original merger took place, one of the main priorities back then would have been to clear the slag heaps. It was not all that long after the Aberfan disaster, and people were still conscious of it from eight years previously.
People saw that as a high priority for two reasons: first, it released land; and, secondly, it improved the environment and made the environment in the valleys of north-east Wales and especially in industrial south Wales more attractive to industrialists. Accordingly, factories were built on the cleared land, and the parts that could not be made flat enough on which to build factories were landscaped.
Rather than discussing how social the Welsh Development Agency cum economic powerhouse should be, at that time we would have been discussing how environmental it should be, and to what extent it should be allowed to dilute—

Mr. Denzil Davies: That is made perfectly clear in the Welsh Development Agency Act 1975. One of the four purposes set out in the Act is
to further the improvement of the environment in Wales".


That means clearing the slag heaps. Another purpose is
to further the economic development of Wales".

Mr. Morgan: That is precisely my point. The question was how environmental the WDA should be. The question now is whether the social aspect dilutes that function. That was the point made earlier by my hon. Friend the Member for Merthyr Tydfil and Rhymney. In other words, if functions are added to an economic development agency, is its focus diluted?
There was great criticism of the environmental aspects of the early WDA. [Interruption.] My right hon. Friend the Member for Llanelli denies that, but I can tell him that it is true. I wrote an article on the subject. My right hon. Friend is not the whole of the human race and he may not remember that, so he should not rush to denials too quickly. He may not remember my article in the Western Mail, but that is his problem, not mine.
The issue is the same: is the focus of an economic development agency diluted when functions are added to it? Is it better for the agency to concentrate solely on economic agencies, and for other agencies to specialise in other functions? Are merged functions a good idea, because they would help along the general process of improving the wealth and prosperity of the Welsh nation? Should that be done by several agencies, or by a merger of three agencies, as we did when we set up the WDA in the mid-1970s and as we are doing now?
The issue is complicated by the fact that one of the predecessor agencies had a social function. For the DBRW, the main problem was not unemployment, but depopulation. Unemployment was quite low, but the young people would not stay because they had none of the facilities of town life. The DBRW thought that, with more social development, people would not mind staying in the area. People did not want to stay on the farms and little villages.

Mr. Lembit Öpik: Does the hon. Gentleman agree that exactly the same problem persists, particularly in areas such as mid-Wales, and that that is one of the most powerful arguments for the proposals in hand?

Mr. Morgan: I think that the hon. Gentleman is confirming what I thought about the basis of "social". If the word is put into the Bill, will there be a dilution throughout Wales in both rural and urban areas? That point was made by my right hon. Friend the Member for Llanelli. Such a dilution would put pressure on the social side of the budget. If the word is not inserted—I think that that is what the Tory amendment seeks to achieve, although I did not hear the hon. Member for Ribble Valley (Mr. Evans) arguing this—and social development does not feature at all, it cannot be applied in mid-Wales, let alone urban Wales. It seems that that is the meaning of the Tory amendment. The hon. Gentleman may not wish to advance that argument but it seems that that is the meaning of the amendment.

Mr. Evans: I am not sure whether the hon. Gentleman was listening carefully enough. The right hon. Member for Llanelli (Mr. Davies) suggested that we could either

demarcate the rural areas that now receive social development aid to ensure that they, and only they, continue to receive it, rather than places such as Swansea, Port Talbot or Neath, which would have arguments to advance for social development, or devolve down to the local authorities. Both suggestions could be carefully considered.

Mr. Morgan: The hon. Gentleman is saying that he was speaking in defence of the amendment tabled by my right hon. Friend the Member for Llanelli. I was saying that the hon. Gentleman was not speaking to the Conservative amendment, which would remove the ability of the economic powerhouse or super-agency even to continue what the three predecessor agencies are now able to do, especially the Development Board for Rural Wales, in promoting social development in mid-Wales.
I hope that my hon. Friend the Minister will deal with whether the addition of the words "and social" will allow the merged agency to continue what the DBRW does now in mid-Wales and with whether the intention is to extend the social development function to rural areas of Wales that are not in mid-Wales. Finally, is it intended that there should be social development in any part of Wales, be it urban, non-mid-Wales rural or a continuation of the area of mid-Wales?

Mr. Denzil Davies: There is no question of intent; we are dealing with what the legislation will provide. Social development will cover the whole of Wales. It will not be restricted to Powys or rural areas generally. It is not a matter of intent. Perhaps my hon. Friend will read the proposed legislation.

Mr. Morgan: I do not know why my right hon. Friend thinks that I do not understand that. Perhaps the issue is whether ministerial replies have any purpose. I am saying that ministerial replies have a function in the proceedings of the House of Commons. That being so, there is some purpose in asking the Minister to explain what the clause is intended to mean in terms of the operation and budgeting of the agency and what the merged agency will be told to do, for as long as he has any influence over it. My hon. Friend will be aware of the influence of judicial reviews in grey areas. We know that what Ministers say at the Dispatch Box counts in grey areas. That is why I am asking the Minister to perform the usual function that Ministers undertake when they reply to debates in Parliament.
It is obvious from the way in which the Bill is structured that we are terminating, through the legislative structure of the Bill, the DBRW and the Land Authority for Wales. We are making the WDA the taking-over body, legislatively, of the other two agencies to which I referred. This may be a merger in the minds of Ministers, but legislatively there will be a takeover. That is clear from the structure of the Bill.
The issue is whether we should try to buy off the possible opposition of those who work in or are served by, in the case of mid-Wales, the DBRW, including those who have a particular interest in urban regeneration and land development, by saying, "Do not worry. As we are making the WDA the superior agency, we shall try to curry some favour with you by doing something for you in the wording of what will be an Act—for example,


adding the words 'and social'—so that it is clear that the DBRW will have a continuing influence even though its legal being has been terminated."
The same process is occurring with staffing levels. My right hon. Friend the Secretary of State has already said that the chairman of the WDA will be the successor chairman, and that the chief executive will be the successor chief executive. Including the words "and social" could be seen as the quid pro quo for these two processes. Even this is being said, "The WDA can take over the other two bodies and we shall be the superior body, but we shall draw back from some of the activities of the WDA that the DBRW never undertook, including inward investment from abroad by having offices abroad." The international division of the WDA feels very much under threat precisely because of that quid pro quo.
We have the words "and social"; a parallel in terms of the staffing structure is that the WDA gets the chairman and the chief executive. At the same time, the DBRW-type attitude that business services are important while inward investment is not so important will be reflected in the staffing structure. That is an alarming prospect. The parallel structure to what is proposed in the amendments will gnaw away at the international division and the overseas representation of the WDA.
The WDA is already the smallest of the bodies that serve the British Isles through overseas representation. The development authority for Northern Ireland has 57 people working abroad. The Locate in Scotland office has 37, the Northern Ireland Industrial Development Board has 33 while the WDA has 25 from 1 April. Perhaps these words are being used, "We know that the WDA will have the chairman and the chief executive, but do not worry. There will be a lot of DBRW and LAW influence below that level. We are showing you that by shrinking the international division. The DBRW was never so involved in mid-Wales because the WDA always acted for you. The styling of the agency is to withdraw from some of the overseas markets and no longer to have a presence abroad." That would be a tragedy.
The parallel that can be drawn from the amendments is a structure that will work away at staffing levels. Given the staffing structure being devised in the merged arrangements and the announcement that was made a few days ago about the chairman and the chief executive, we shall have not an economic powerhouse but an economic power mouse. There will no longer be the ability to draw in firms from abroad. The pass will have been sold. In effect, it will be said, "The WDA can have the top jobs, but after that we shall start drawing in the horns of the old WDA function because it was expensive. There were offices in Seoul, Tokyo, north America and elsewhere. If we pull out of that, the Invest in Britain Bureau in London will be very happy, as will the Department of Trade and Industry. We shall pull out of all that."
That having been done, the WDA will not be an entirely dominated organisation in future, because it will not involve excessive resources and savings of £3 million will be achieved, at least partly by pulling out from some of the admittedly expensive offices abroad. However, if the WDA is already the smallest of the big four organisations that represent the parts of the United Kingdom—Northern Ireland, Scotland and Wales—and is already operating at a level that barely amounts to a critical mass in most of the key markets for inward investment, there will be difficulties. If there were a cut

while trying to maintain a share, which the right hon. Member for Caernarfon (Mr. Wigley) was talking about—cutting a body with only 25 staff abroad to 15, for example—the agency would not be viable. There would then be pressure from the IBB to wind the whole thing up because it would not be worth running.

Mr. Livsey: I am grateful to the hon. Gentleman to allow me to intervene, because it seems that I shall not be able to make a speech during the debate. I apologise for being absent earlier. Some Territorial Army units in my constituency are under threat and I had to leave the Chamber on that account.
The news yesterday was that the international division of the WDA might be cut by four people while the DBRW might be cut by 60. If that is true, the social development and business connect functions of the DBRW are under threat. I hope that the Minister will reassure us that these cuts will not take place as a result of amalgamating and restructuring the WDA into a powerhouse.

Mr. Morgan: If what the hon. Gentleman is saying is true, we want to know from the Minister from where the savings of £3 million will come. Will each part share the cuts and misery proportionately so that ex-DBRW parts are subject to a cut, along with the WDA and its international division? Will it be proportional? The suspicion is that the international division will be subject to the biggest cut and may, as a result, fall below the level of a critical mass in overseas matters.

Mr. Letwin: I shall be brief, as time is pressing. My speech flows from the remarks, as has often been the case during the Bill's consideration in Committee, of the right hon. Member for Llanelli (Mr. Davies). I draw the Committee's attention to a constitutional question that arises as a result of the definition of social development.
I remind the Committee that there is something procedurally odd about what is going on in this clause, as clause 29(1) gives the Welsh assembly enormous powers to redefine, as the Secretary of State has eloquently described on other occasions, the role of the Welsh Development Agency, and, indeed, to terminate its functions entirely, if I am not mistaken. It is therefore odd that the Government have chosen to extend the WDA's role by statute of the House rather than allow the assembly to make that decision, as the assembly will be allowed to do in relation to the continuance or restriction of the WDA's function. We must therefore look at what importance will be attached to the change in the WDA's function.
Like the right hon. Gentleman, I have looked at different sources for a definition of "social development". The European literature, which will be extremely important guidance to United Kingdom courts in determining this, has a much wider definition than that suggested by the right hon. Gentleman. The transfer of functions order lists all the classes of activity that could be classed as economic.
When one sees the classes of activity that will be transferred to the assembly, it could be argued—if time permitted, I would do so—that each and every one of the remaining non-economic functions could be classed as social development. There is at least a risk—perhaps a severe one—that the WDA, if it so chose, could gradually establish a right to intervene in every area of government in which the assembly will also have a right to intervene.
Section 1(6) of the Welsh Development Agency Act 1975 states what the agency's powers are in relation to its scope. It says:
The Agency shall have power to do anything"—
a remarkable statement—
whether in Wales or elsewhere, which is calculated to facilitate the discharge of their functions … or is incidental or conducive to their discharge.
That is the widest definition that could be given of the powers that a body could have, given to it by statute. If the scope of power given to it by statute broadly approximates that given to the Welsh assembly, there will be two bodies in Wales—one will be reformed; the other established—both of which appear to have, within roughly the same scope, broadly unlimited powers to do broadly anything, so long as they do it procedurally in the right manner.
We must then look at where the money flows. We have, I fear, a confused picture. Perhaps the Minister can reassure us that I have misunderstood the position. I believe that, although the assembly will be responsible for the current expenditure of the WDA, under section 18(3) of the Welsh Development Agency Act 1975, which does not appear to contain an order-making power that is being transferred under the transfer of functions order, the Treasury and the Secretary of State will determine the total expenditure of the WDA, because it falls to them to determine its aggregate level of external financing.
Looking some years ahead, to an assembly that is dominated by a political party or parties different from those that dominate the House and constitute the Government of the United Kingdom, we see the classic recipe for constitutional tension: an agency which can do everything which, broadly speaking, the assembly can do; which has the widest powers in relation to that scope; which is funded, at least in part, directly from the Government of the United Kingdom; and which can set itself up in opposition to the Welsh assembly.
The assembly will, of course, in part be the agency's paymaster. What a fertile field in which constitutional problems can arise, for example, if the Secretary of State of the day or the Treasury seek to use the WDA as a means of directing funding through the external financing limit powers, against the interests of its nominal paymaster—its current expenditure paymaster—and the body that is meant to be in charge of it.
I am not trying to argue that all these problems will arise at once; I am trying to argue that, by inserting the word "social", with its wide connotations—I doubt that whatever the Minister says at the end of the debate will much influence the judges in this matter—the Government will have created the ability for the two bodies to be in tension in a way that the Government, or their successors, will come to regret.

Mr. Hain: I am sorry to have to reply to the debate at this point. I realise that I might have stopped some of my hon. Friends from speaking, for which I apologise.
Amendments Nos. 374 and 493 would mean that the social development powers of the Development Board for Rural Wales were lost with the abolition of the board.
That is the important point. The White Paper "A Voice for Wales" set out the Government's plan to consolidate the functions of the DBRW and the Land Authority for Wales into the WDA, to provide a unified and comprehensive range of services for the whole of Wales. Indeed, that is done at local authority level, where regeneration plans reflect a comprehensive approach, involving economic, social and environmental development.
In the past, the DBRW has made effective use of its social powers to contribute to the development of rural communities, complementing the role of local authorities—for example, a £25,000 project in Ceredigion to convert a warehouse into a sports centre. Other instances include support for jazz and music festivals, opera performances and youth clubs.
The Bill clearly establishes the powers of the new agency to be a full and effective partner in economic and social development schemes all over Wales. Obviously, the way in which this power is used in the future will be subject to the wishes and guidance of the assembly, but these amendments would deny any prospect of progress in that direction.
I shall respond specifically to the typical probing and forensic points made by my right hon. Friend the Member for Llanelli (Mr. Davies). He raised legitimate points, in contrast to the somewhat legalistic points of the hon. Member for West Dorset (Mr. Letwin). I would not for a moment accuse the hon. Gentleman of misunderstanding the Bill, but he missed its point entirely and sought to confuse it in an argument—one that is fundamental to the Conservatives' opposition to the Bill—about tension between Westminster, which sets the funds for the assembly, and the assembly, which would control the new WDA powerhouse agency.
The social activities envisaged are pretty small-scale. I gave examples a moment ago. They would not threaten the overwhelming industrial and economic focus for the activities of the powerhouse. The new WDA will, of course, be accountable to the assembly. Its programmes, including social development, will therefore be subject to scrutiny by the assembly under section 1(14) of the Welsh Development Agency Act 1975. No Treasury consent will be required. If there were any question about the activity of the powerhouse veering too much, say, in a social direction, the assembly would be able to call it to account. It would scrutinise that and deal with any problems that arose.
My right hon. Friend the Member for Llanelli and my hon. Friend the Member for Merthyr Tydfil and Rhymney (Mr. Rowlands) asked about the definition of the term "industrial" and the balance between business and industry. We propose to substitute the term "business" or "businesses" for "industry" or "industrial", which is used in the Welsh Development Agency Act. We have made that change simply to use a more up-to-date expression which better captures the nature of the modern Welsh economy.
I note that my right hon. Friend accepted that that change was fine, but he made some specific points, to which I shall come later. The change does not imply that the term "industry" provides too narrow a definition of the type of body that could be supported under the Welsh Development Agency Act or any other legislation.
With regard to my right hon. Friend's point about profit, the definition in the Bill, in particular in paragraph 10 of schedule 10, is really to ensure that there is no attempt to exclude, for example, co-operatives. The intention was to make the WDA's remit as wide as possible. Other examples might be a business conducted by a charitable trust on a break-even basis, or a village shop run by a local community. Therefore, there is not a great deal to be concerned about, although my right hon. Friend was right to press us on that.

Mr. Evans: Why does the definition of "business" also include public bodies? Does not that mean that even the Welsh Office could apply for grants for, for example, business efficiency? Why is the definition so broad as to include public bodies?

Mr. Hain: The hon. Gentleman should read the Bill carefully.

Mr. Jenkin: Answer the question.

Mr. Hain: If the hon. Gentleman will allow me to do so, I shall answer the question.
The definition in schedule 10 is clear. It rightly gives the new WDA extremely wide powers. Unlike the hon. Member for Ribble Valley (Mr. Evans), we do not want to shackle it.
My hon. Friend the Member for Merthyr Tydfil and Rhymney asked about service. I agree that the heart of any successful economic strategy for revitalising the Welsh economy must focus on manufacturing and industry. That has been terribly neglected in the past couple of decades—a point on which we have often agreed, and I continue to do so. I think that my hon. Friend claims that the birth of manufacturing took place in Dowlais, and he may have a point there.
It is important that service industries are included. For example, a call centre might well be classed as a service business rather than a manufacturing industry, self-evidently. I agree that manufacturing must be given priority, both in terms of inward investment and indigenous investment, which has particularly been neglected in the past 18 years.

Mr. Rowlands: In the past, when motor vehicle repair businesses or garages applied for some support from the WDA, it said that that was not a service sector which it should support. In the changes that have been made, would it now be included in the responsibilities of the WDA?

Mr. Hain: It is quite possible that it would be. The broad remit for the powerhouse would reflect that. It is an attempt not to shackle it, but to empower it, so that it can conduct the necessary economic support activity.
The right hon. Member for Caernarfon (Mr. Wigley) raised some pertinent points, for which I thank him. I emphasise that the balance must be in favour of economic, industrial and business activity. We have set specific targets to shift investment westward. It is difficult, but we are determined to continue with that.
As to the wish to make it a function of the agency to promote social equity in Wales, I remind the Committee that, for the first time, the Bill empowers the agency to

address social development. Social equity is better achieved by a cohesive partnership between public and private bodies involved in service provision. That means not just the agency but the assembly, local authorities, the voluntary sector and many other bodies. I am sure that the social development powers of the Development Board for Rural Wales, which the Bill will transfer to the agency, will help it to contribute to the effort. Amendments Nos. 374 and 493 would prevent that transfer.

Mr. Letwin: If the Minister is admitting that social equity could be included within social development, can he name any activity that would devolve to the Welsh assembly which might not be considered as falling within the remit of the WDA?

Mr. Denzil Davies: Not many.

Mr. Hain: That is probably true. We intend to create a powerful agency.
The hon. Member for Ribble Valley made an important and legitimate point—for a change—about whether the assembly would be meddling in the WDA's activities. The answer is no. The assembly will set clear targets for the new powerhouse. It will monitor it and hold it accountable for delivering the strategy which it determines as an assembly. But decisions on day-to-day matters, such as inward investment and the level of grants in attracting inward investment, would be made by the powerhouse, not by some Committee of the assembly.
I am aware of the interest of the right hon. Member for Caernarfon in the comparative arrangements for export promotion and development in Scotland and Wales. He made some important points. I am pleased to reassure him that the existing WDA legislation provides the necessary powers for it to undertake export promotion activities, so his amendment is not necessary.
At the moment, the Welsh Office is the main provider of export and advice services throughout Wales, while the services provided by the WDA are often sector specific. Other bodies, such as the chambers of commerce, training and enterprise councils and export associations, have been working with the Welsh Office to review and improve services to help small and medium enterprises in Wales to export more. We will bear the right hon. Gentleman's points in mind.
I also listened with care to the right hon. Gentleman's points about the WDA's vital international role, and his Scottish point, which we note with interest. My right hon. Friend the Secretary of State has made it clear that there will be no Whitehall veto over his powers in respect of financial arrangements and so on, and therefore over the assembly's powers with regard to inward investment.
My hon. Friend the Member for Merthyr Tydfil and Rhymney asked whether there would be a Welsh energy policy. The power to give consents for power station development will still reside with the Department of Trade and Industry, but the WDA will obviously have an interest, as it has at the moment in promoting the power station development at Baglan.

Mr. Denzil Davies: Will my hon. Friend give way?

Mr. Hain: I am sorry, but I have only a couple of minutes left.
I can tell my hon. Friend the Member for Cardiff, West (Mr. Morgan) that I deny emphatically that there is any attempt to run down the international activity of the WDA. I owe my hon. Friend a letter on that point, and I shall write to him addressing the points that he raised.
My right hon. Friend the Secretary of State has asked for the resignations of all 27 members of the three quangos which are to be merged to form the economic powerhouse for Wales—the WDA, the DBRW and the Land Authority for Wales. They will stand down this autumn, when the new body is created and a new body is appointed. We shall shortly advertise those appointments, and, in addition to new candidates, I have no doubt that many of the existing members who have given dedicated service to Wales will wish to put their names forward.
We are determined that all other board members of the new powerhouse will be appointed in the same fair and open way as the chair of S4C. The new board will not be open to accusations of cronyism; nor will any other appointments made in the new Wales. People are looking to Wales to give a lead in establishing new, more open and accountable ways of managing public bodies and the Government are giving the lead. We are making a clean break from the old, scandal-ridden quango state, and I urge my right hon. and hon. Friends not to press the amendments.

Mr. Denzil Davies: My hon. Friend the Minister made it clear that the Government have no intention of shackling the WDA, and that the purpose of the changes was not to do so. There will thus be a considerable extension of the WDA's powers.
I realise that I will not get an answer now, but may I ask my hon. Friend rhetorically whether the money will still be shackled? If the powers are to be unshackled, will the moneys be similar in quantum to the current powers?

Mr. Hain: rose

Mr. Davies: I am sorry, but I shall not give way to my hon. Friend. I have one minute, and I intend to use it. I am sure that he wants me to withdraw the amendment when the time comes.
Let us have extra powers for social development, but let us also have the extra money that goes with it.

Mr. Hain: indicated assent.

Mr. Davies: My hon. Friend is nodding, so I presume that the Secretary of State will go to the Treasury and say that we want more powers.
I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.

6 pm

Mr. Cynog Dafis: I beg to move amendment No. 517, in page 56, line 11, leave out from `Wales' to first 'and' and insert
'leave out "economic" and insert "sustainable economic, environmental".'.

The Temporary Chairman (Mr. Barry Jones): With this, it will be convenient to discuss the following amendments: No. 518, in page 56, line 13, at end insert—

'(c) after paragraph (d) insert—
(e) to promote the environmental sustainability of economic activity in Wales; and".'.
No. 522, in page 56, line 26, at end insert—
'(3A) After subsection (4) there shall be inserted—
(4A) In allocating its resources and setting its priorities, the Agency shall have regard to the need for sustainable economic development throughout the whole of Wales.".'.
Government new clause 38—Sustainable development.
New clause 18—Principle of sustainable development—
'(1) The Assembly shall make appropriate arrangements with a view to securing that its functions are exercised with due regard to the principle that there should be economic and social development which is environmentally sustainable.
(2) The arrangements referred to in subsection (1) shall include an annual review of the implications for Wales of any relevant quantitative targets for the United Kingdom set by Parliament or by Ministers of the Crown.
(3) After each financial year of the Assembly, the Assembly shall publish a report containing—

(a) a statement of the arrangements made in pursuance of subsection (2) which had effect during the financial year, and
(b) an assessment of how effective those arrangements were in promoting sustainable development.'.

New clause 37—WDA board member to have responsibility for sustainable development—
'.—Section 2 of the Welsh Development Agency Act 1975 shall be amended by inserting the following subsection—
(3A) One member of the Agency shall be responsible for monitoring progress on the sustainable development aspects of the Agency's work.".'.

Mr. Dafis: I welcome the opportunity to debate at last, after several attempts, sustainable development. There is hardly a more important topic in considering a national future for Wales and the roles of the national assembly and the new development agency.
Some of the amendments and new clauses in this group apply to the assembly and others apply to the development agency, but none applies to both. We welcome the Government's long-awaited new clause 38, which applies to the assembly but not to the development agency. Inserting that new clause in the Bill may mean that our national assembly will be the first national legislative body to have a statutory duty to consider sustainable development. That is welcome and, if it is taken seriously, it could be highly significant for the future of Wales. We strongly believe that both the assembly and the development agency should be subject to such a duty, and I shall explain why later.
Amendment No. 517 inserts the words, "sustainable economic, environmental" in place of the word "economic" in relation to the WDA's functions. Amendment No. 518 would add the words:
to promote the environmental sustainability of economic activity in Wales
in line 13. Amendment No. 522 refers to the need to allocate resources and set priorities for the agency, and says that those
shall have regard to the need for sustainable economic development throughout the whole of Wales.


The concept of the "whole of Wales" has already been discussed and I am sure that it will be discussed under the next group of amendments when we consider rural policy.
New clause 37, which I like to think is ingenious, would require one member of the agency's board to be responsible for monitoring the progress of the sustainable development aspect of the agency's role. Just as some organisations have a sustainable development unit, it would be useful to have one person on the board with the job of monitoring progress.
New clause 18 concerns the assembly and would have a similar effect to the Government's new clause. By the way, a small error appears in new clause 18, subsection (3)(a), in which reference should be made to subsection (1) rather than subsection (2).
Sustainable development is not just environmental protection, important though that is. It is certainly not just preservation, which has its place. Nor is it about keeping matters as they are. It is about making improvements in efficiency, prosperity and people's quality of life in a way that sustains and strengthens the natural environment and social equity. The concept of social equity was discussed briefly under the last group of amendments. I shall not spend too much time on it, but it might be worth bearing in mind the development advocated by David Adamson of the university of Glamorgan as part of the process of economic regeneration. He advocates taking hold of an area where there is social deprivation, helping the people to acquire skills, empowering them to use fashionable terms, and bringing about economic regeneration from the bottom up as well as from the top down. That example of using an agency's powers for social purposes is functional in relation to economic development. It is also an aspect of sustainable development.
Thus, sustainable development means integrating—that is the important word—environmental and social equity considerations into all aspects of policy. Implementing sustainable development means identifying and then actively pursuing opportunities for development that bring those three elements together. It is not possible for the Welsh Development Agency or the assembly to pursue only sustainable development. We live in a world where a great deal of development is unsustainable. That may come to an end at some stage, but if one is committed to sustainable development, one is always looking out for opportunities that bring those three elements together. It is not always easy, but the scope is great and it will become greater as policies change at all levels: global, European, British and Welsh.
I am confident that the national assembly will meet as sustainable development rises to the top of the political and economic agenda. Achieving the transition to sustainable development will be the dominant theme of the new century. We are all caught up in that global process to a greater or lesser extent. The latest phase is the Kyoto agreement on greenhouse gas emissions. The process extends from the global to the local level through the Agenda 21 process.
We have a serious opportunity to put Wales at the forefront of that transition to sustainable development, just as Wales was at the forefront of the transition to industrialism 200 years ago, when our resources of energy were a crucial consideration. The assembly therefore has every reason to adopt sustainable development as a central theme for Wales. Until now, there has been a significant

failure in Welsh Office policy in that regard. In 1993, the Government published their first sustainable development strategy and established an advisory panel on sustainable development, chaired by Sir Crispin Tickell. It established a useful round table, which has been meeting regularly and proposing policy recommendations. Both those bodies have done useful work.
On the day in February when that launch occurred, the Scottish Office, when Ian Lang was Secretary of State for Scotland, set up an advisory panel on sustainable development and a sustainable development unit within the Scottish Office. I am told that both do useful work within the Scottish Office. That did not happen in Wales. The then Secretary of State for Wales refused to do that, and opportunities have been lost as a result. No working group was set up and the previous Administration rejected my request in a debate in this House, and requests from others, to establish such a process. We have had nothing of that seriousness in Wales.
Consultations on the Government's new sustainable development strategy document, "Opportunities for Change", which was published a fortnight ago, will be completed by the end of the year. That process must be used to develop a distinctive Welsh agenda on this subject: it should not be an appendix or a pale imitation of what is happening in England or throughout the United Kingdom.
If the Government have ideas that are ready for implementation and that will put Wales at the forefront, the assembly will hit the ground running when it meets in the summer of next year. A distinctive agenda could be part of the brand image of Wales and establish Wales's reputation in Europe and the world. How will the Secretary of State use the consultation process for such purposes?
The energy sector is relevant to sustainable development. Wales has major sustainable and renewable energy resources. The Government are committed to generating 10 per cent. of electricity from renewable resources by 2010. That would enable us to develop diversity and security of supply at competitive prices.

Mr. Denzil Davies: I am following closely the hon. Gentleman's argument about energy and sustainable development. Does he agree that nuclear power stations do not transgress the principles of sustainable development?

Mr. Dafis: No, I do not. Some people suggest that nuclear energy enables us to meet CO2 emission targets because carbon is not used. However, it is unsustainable because of problems with decommissioning nuclear power stations and disposing of wastes. There is a debate on the issue. My view is that substituting nuclear for fossil fuel-based energy is not sustainable, but other options are.
Sustainable or renewable energy involves a dispersed and decentralised pattern of production and offers significant wealth creation and job opportunities in rural areas. Many of those opportunities are frustrated by the nature of the debate on renewable energy in Wales. The assembly and the agency should ensure that we have a more sophisticated understanding and a more intelligent debate. Wales could take a lead. The debate is not just about renewable energy. Offshore oil and gas resources will not be subject to decisions of the assembly, but it should influence the way and degree to which they are exploited.
Environmental technology—pollution control, emission measurement, end-of-pipe technologies and alternative clean production systems—is an expanding industrial sector that is set to overtake the chemical industry at the global level by the end of this century. The WDA should target this key sector for inward investment. There will be important opportunities in forestry and agriculture and the Secretary of State's initiative on the all-Wales agri-environmental scheme will be helpful.
Sustainable tourism—which is the right sort—and links with economic activities such as farming should be encouraged, and sustainable agricultural areas and woodlands could be a focus for tourism. Sustainability is a pervasive theme that will be terribly important in the planning process. The planning process should actively facilitate rather than frustrate renewable energy projects. Sustainability should be prominent across the curriculum at all levels of education and a key factor in research. Organisations such as the Institute for Grassland and Environmental Research are involved and universities in particular are doing good work and could do more.

Mr. Rowlands: Wind farms are contentious in certain communities. Is the hon. Gentleman suggesting that the right to object should be reduced to make planning more positive and proactive? What is he suggesting in that respect?

Mr. Dafis: I am suggesting that the planning process should be part of an all-Wales strategy. There should be targets for electricity produced from wind power, and that might lead to a search for, and designation of, appropriate sites. I do not favour removing the right to object—that would be dictatorial—but the planning process can be used positively. Planners must understand the significance of a scheme when they make their decision. I believe that many planners are not sufficiently well informed.

Mr. Öpik: Does the hon. Gentleman agree that acrimony arises in local communities over issues such as wind farms precisely because of the absence of a sustainable energy development strategy? If there were such a strategy, perhaps wind farms would not be built piecemeal and communities would not be upset.

Mr. Dafis: I do not want to get into a protracted argument about wind farms.

The Temporary Chairman: Please do not.

Mr. Dafis: If we are to have a sustainable development strategy for Wales, we must also have a sustainable energy strategy.
The assembly will have transport responsibilities. Wales needs an integrated transport policy to reduce road traffic. As the Government are committed to achieving a reduction in road traffic, how will the assembly develop such a policy? The Welsh road and rail network was conceived outside Wales. It is peripheral to the English network—no wonder we have poor north-south links. A sustainable communications policy must contain the right mix of transport modes—road, rail and air—which the Welsh Office has been promoting recently.
Getting investment priorities right will be difficult because the assembly will no more be responsible for rail than is the Secretary of State. There is a clear case for further devolution. The assembly will have to co-operate closely with the Office of Passenger Rail Franchising, the franchising authority. Opraf should be in that list of bodies, set out in schedule 4, that the assembly can require to attend its meetings. I hope that the Minister will consider tabling an amendment to bring that about. The successor body to Opraf—the strategic railway authority—will subsume the franchising functions.
Electronics play a crucial role in communication policy, enabling communication without physical movement, rendering distance irrelevant and reducing the need for road traffic.
Sustainable development is about opportunities, and opportunities for all parts of Wales. It is about industrial areas just as much as rural areas. We shall discuss rural policy later, but it is worth noting that Professor Gareth Wyn Jones, an expert on the subject, suggests that
a comprehensive strategy for the sustainable use of renewable natural resources in rural Wales could create about 10,000 new jobs".
Given the multiplier effect, the professor reckons that as many as 14,000 jobs could be created.
That is just one reason why I consider it essential for sustainable development to be a duty for the new WDA, not just for the assembly. A revamped WDA will, after all, be up and running before the assembly meets, and sustainable development should be one of its key considerations from the outset—it has not been one in the past. The agency needs to build a sustainable development culture. It needs to get its head around the philosophy and the principles of sustainable development, and it needs to develop expertise.
The Welsh Development Agency Act 1975, which the Bill amends, refers to the environment, but the wording shows that the agency's environmental functions are seen separately from its other functions. It has tended to interpret the Act's provisions in aesthetic rather than deep sustainability terms. After all, the Act predates Brundtland, Rio and the process that has resulted from all that.
I understand that sustainable development is to be a duty of the English regional development agencies. That is in the Bill, and I want to know why the same does not apply to the WDA. May I also ask whether the Secretary of State has received any representations from the WDA opposing the duty of sustainable development? It should be at the heart of the agency's responsibilities, not at the fringe. It should not be an add-on, as it has tended to be in the past. The agency should be able to explore the environmental implications of development at an early stage, in order to avoid many of the damaging, costly conflicts that can develop during the process of pursuing a particular kind of development.
The subject is linked to the question of land use planning. I hope that the Secretary of State can assure us that the assembly will have the power to produce strategic planning guidance for Wales, which would help the agency—for instance, in relation to the location of inward investment projects. It would be stimulated, or indeed required, to locate inward investment projects, and other development projects, on previously developed land—what the Deputy Prime Minister now calls recycled land;


it used to be called brown-field sites. In that way, we could integrate land use in industrial development. The use of such areas, rather than green-field sites, should be preferred, if not exclusive.
We have a major opportunity to make sustainable development a defining theme for Wales and its assembly. I hope that I have shown how important it is that the WDA, as well as the assembly, has a duty to bring about such development.
Would the Secretary of State consider strengthening the wording of new clause 38 at a later stage? It uses the word "promoted", but it has been suggested to me that we should instead refer to the "achievement" of sustainable development, as other legislation does. For example, the Environment Agency has a responsibility to bring about—or aim to bring about—the achievement of sustainable development. It is a small point, but that duty should be seen as really important, and there should be no way of avoiding its implications. However, I admit that some of our amendments also refer to "promoting".
I look forward to hearing from the Secretary of State, and from other hon. Members.

Mr. Chris Ruane: I intend to make only a short speech, based on my personal experience of the area that I come from in north Wales.
I welcome new clause 38, which recognises the importance of sustainable development. If the Welsh assembly adopts a strong sustainable development policy, we shall lead the way in the United Kingdom on the issue. Sustainable development is important in all areas of Wales, but especially in areas that depend on the environment for employment. In my constituency, the towns of Rhyl and Prestatyn developed, grew and prospered because of their location and their seaside environment. As well as its coastal environment, however, my constituency is blessed with an area of outstanding natural beauty, which straddles the Clwydian range and sweeps down into the vales of Clwyd and Elwyn.
Unsustainable economic development has had a devastating effect on all parts of Wales. The whole north Wales coast has suffered from environmental degradation caused by past Governments, councils and industries that have used the environment as a cheap means of disposal. There has been a knock-on effect for subsequent generations—including this one—and on today's environment and economy.
Let me give an example drawn from my own constituency in the 1960s. Rhyl urban district council decided to use a 60-acre salt marsh on the River Clwyd—one of only three north-facing rivers in north Wales—as a rubbish dump. It was seen as a cheap option. Domestic and industrial waste was taken across north Wales and dumped on that haven for wildlife. No record was kept of the rubbish that was dumped there over a 20 or 25-year period, and no one knows to this day what was dumped. It is a chemical time bomb. The rubbish was piled 40 ft high, and bulldozed over with a metre of topsoil. The land is now so polluted that it cannot be used for housing or industrial purposes. Methane is bled out of the rubbish tip by valves, and rain water washes out leachates into the surrounding mud banks and into the Irish sea. The land has been polluted for over a generation, and will probably be polluted for many generations to come.
That is just one example. I could give many others. There is the dumping of sewage into rivers and the Irish sea; the dumping of radioactive waste from Sellafield into the Irish sea; chemical and industrial dumping along the River Mersey; the dumping of armaments, including chemical weapons, into the Irish sea over the past 50 years; and the cleansing of ships' tanks in Liverpool bay. A Welsh assembly armed with a sustainable development policy will drastically reduce the possibilities of such environmental degradation in the future.
I am pleased that the implementation of the new clause will not be delegated to a committee or an individual. I am glad that the sustainable development policy will be monitored and updated regularly, and I am also glad that the assembly will consult appropriate bodies before making, remaking or revising the scheme. I hope that the assembly will consult widely and listen carefully to the expert advice that it is given, in order to draw up a policy that will learn the lessons of the past and serve this and future generations.

Mr. Evans: I support new clause 38. I hope that the Secretary of State will not fall off his seat when he hears me say that. [Laughter.] Even I do not believe what I am saying. I think that the new clause is a sensible way of approaching an issue that is vital not only to all of us, but to future generations. That is what sustainable development is all about. It involves thinking about present and future generations.
Everybody is "green" nowadays and it will be interesting to see whether the Secretary of State chooses a green-field site, or recycles city hall or the guild hall in Swansea for the assembly. I understand that there will shortly be an announcement about how green he intends to be on its siting. I am told that Ministers are giving up cars and walking. As Gwydyr house is not far from here, I expect that the Secretary of State is doing that. Perhaps his car follows him carrying his red box or perhaps he carries it himself.

Mr. Dafis: The hon. Gentleman speaks about the assembly building. I hope that he and the Secretary of State agree that it presents an opportunity for energy efficiency. It may produce some of its electricity by means of new technology such as photovoltaics, and it is important that it should be accessible by public transport.

Mr. Evans: I am sure that if the hot air from the Chamber was recycled, it would heat the Palace of Westminster and some other buildings. The hon. Gentleman makes an important point, and if the Secretary of State chooses a green-field site for the development, it will be necessary to examine the project at the planning stage. That is the best way to ensure energy efficiency, and I hope that that will be taken into account.
We are building on Agenda 21 and the second Earth summit, which was preceded by the Rio summit in 1992. New clause 38(6) refers to a yearly account to show exactly how the assembly has implemented its proposals, and that will enable people to measure how seriously the assembly takes sustainability. I hope that the partnership council's discussions with local authorities will give direction and a fresh impetus to an all-Wales strategy. The


hon. Member for Ceredigion (Mr. Dafis) spoke about that. It will also enable people to see how local authorities are fulfilling their agendas.

Mr. Ron Davies: The hon. Gentleman mentions an interesting concept. Perhaps he will explain why he and his colleagues voted against the partnership council.

Mr. Evans: We voted against it because we thought that it would not have any teeth and that it was to meet only once a year. As the right hon. Gentleman knows, I spoke about it meeting perhaps eight times a year. I hope that the other place can look again at the partnership council and give it some real teeth. There should be proper discussion between local authorities and Members of the Assembly on matters such as sustainable development. One of the assembly Committees could examine sustainability as part of its environmental remit. It must be given impetus in Wales rather than lip service.
The hon. Member for Ceredigion mentioned other areas that we should examine; one of them is traffic. I know that local authorities will look at traffic problems in their areas; we appreciate that large cities are not the only places with such problems. The assembly can offer guidance and support to local authorities on traffic management. For example, perhaps the railways could carry much of the freight that will result from new investment in Wales.
I was born in Swansea, and I suspect that if sustainability had been on our consciences in the 1960s, the Mumbles railway would still be operating in Swansea. Because of a wanton act of vandalism, that railway is no more. It is unlikely that it will be brought back, but at least its fate enables us to learn from our mistakes and discover ways in which we can protect other features in Wales for future generations. If the Mumbles railway had been retained, it would not have produced the amount of exhaust gases that are currently pumped out by cars using the Mumbles road.
The hon. Member for Ceredigion spoke about giving the WDA a bigger role. The assembly can give guidance and encourage development and new investment on brown-field sites. At the design stage of buildings for new industries, more heed could be paid to sustainability and more environmentally friendly ways of building. On energy policy, we all carefully follow planning policy guidance 22. Wind energy was mentioned, and it would be remiss of me if I did not speak about that, because Wales has suffered more than most areas from the erection of wind turbines in places where they should not be.

Mr. Dafis: Does the hon. Gentleman agree that Wales enjoys a large amount of wind energy development? Such energy is clean, and involves no extraction, transport, processing, combustion or emissions. Can the hon. Gentleman think of a better way of producing electricity?

Mr. Evans: As the hon. Gentleman knows, I disagree with him on that issue. I am president of Country Guardians, and I was in touch with Ann West, who lives in Powys and has written to me today about the problem of wind energy generators in Wales. If the wind turbines

are put in suitable areas in accordance with guidance that is issued by the Department of the Environment, Transport and the Regions under PPG22, they are acceptable. If changes are proposed, I should be interested to hear about them.
The assembly could give its views on sustainable energy. The hon. Member for Ceredigion spoke about a target of 10 per cent. of renewable energy by 2010. We support that, but it could mean that an area the size of Birmingham would be covered in wind turbines. We must examine all renewable sources and concentrate not just on an inefficient one, which is the wind turbine. Hydro power is far more efficient. Future wind turbine technology may make that system more efficient, so that fewer turbines are required.
As the Minister knows, some wind turbines are 300 ft high and create noise problems. Sunshine is reflected from them into houses, and they scar the countryside because they can be seen for miles. They cannot be hidden because their purpose is to catch the wind. People who live close to large farms of wind turbines take a certain view of them. I hope that any scheme or strategy that is presented by the assembly will ensure that people can have a say about the sustainable or renewable energy that they want for the future.
The hon. Member for Ceredigion spoke about the new branding for Wales. Of course, it is a green and pleasant country. We want to ensure that it remains just like that.
The Welsh assembly has a great opportunity. I am delighted that the Government have tabled new clause 38, and I hope that the people of Wales and the assembly will grasp that opportunity.

Ms Julie Morgan: I am pleased to speak in the debate, and I especially welcome the Government's new clause 38 on sustainable development. Like the hon. Member for Ceredigion (Mr. Dafis), I think that the new clause will provide an opportunity for Wales to be in the forefront of thinking, by enshrining the principle of sustainable development in legislation. We do not want the public to continue to think that it is always a matter of the environment versus the economy: we want them to realise that one is strongly linked to the other. We want also to integrate successfully economic and environmental goals with social objectives, and to safeguard the environment of Wales.
The debate on this group of amendments and new clauses—especially new clause 38—is therefore a very exciting occasion. I think that sustainable development will be at the heart of the assembly's policies, and I hope that it will be considered as a part of every action taken and policy developed by the assembly.
I have thought about the sustainable development issues that might arise in my constituency of Cardiff, North, which should be dealt with within a strategic framework. In my constituency, the town is gradually encroaching up the M4 towards the mountains, and the A470—which is probably one of the busiest roads in Wales—comes down from the valleys, surging through the Taff gorge and into the constituency, with traffic pouring down towards the centre of Cardiff.
We want a strategic plan to deal with those issues: to preserve the green belt; to maintain the gap between Cardiff and Caerphilly, and between Cardiff and Newport; to allow development in specific areas; to encourage a strong integrated public transport corridor; and to deal with issues such as transportation of radioactive waste, which is one of the big issues in my constituency. If we have an integrated strategy to deal with all those issues, we shall be able to make not only my constituency but all of Wales a much more pleasant and better place to live in.
The location of the assembly has been mentioned in the debate. I should like to say very strongly that I hope that the assembly will be located on recycled land in the centre of a city, in a recycled building and very close to good transport links—such as a five-minute walk from a major station. Only one place fits that description.
Environmental groups have raised some issues on certain aspects of new clause 38, and I should like to have the Secretary of State's reassurance on some of them. One is the use in the new clause of the phrase "with due regard". Does that mean that a duty will be placed on the assembly? Will it require the assembly to promote sustainable development? I am not accustomed to the legalistic language used in Bills, and I should therefore like the Secretary of State to clarify that point.
The new clause also does not mention any measurable targets or indicators. I therefore assume that the Secretary of State expects that the assembly will include such targets in its annual reports. Nevertheless, I should like his reassurance on the matter.
The hon. Member for Ribble Valley (Mr. Evans) mentioned establishing some sort of forum in which environmental groups could meet, and referred to the partnership council. Does the Secretary of State think that the assembly will establish such a forum? Does he think that establishing one should be encouraged?
The Government's new clause represents an historic occasion, putting sustainable development at the very heart of the National Assembly for Wales.

Mr. Öpik: One of the greatest things about living in Montgomeryshire is that it is such a beautiful place: unspoilt, with such a good quality of life that—[Interruption.] I shall deal in a moment with wind farms, although I am not terribly convinced that the hon. Member for Ceredigion (Mr. Dafis) was entirely feasible on the subject. [Interruption.] With the potential exception of wind farms, the view is quite nice, if one looks on misty days or in certain directions—

Mr. Elfyn Liwyd: Yes—towards Meirionnydd.

Mr. Öpik: I shall take the hon. Gentleman's advice and look toward Meirionnydd, and be grateful that I do not have even more wind farms than I currently have.
6.45 pm
The quality of life in Montgomeryshire is good. In the rural areas of Wales, that quality of life is determined largely by the cleanliness and rejuvenating nature of those areas. I agree with the suggestion of the hon. Member for Ceredigion that we could use an environmental theme as a branding point for Wales. In the company that I formerly worked for, Procter and Gamble—I stress that I have no vested interest in saying this—

Mr. Evans: Whiter than white.

Mr. Öpik: Yes, it has a very white image, even at today's lower temperatures. It woke up to the fact—[Interruption.] It awoke—

Mr. Ron Davies: Ignore them.

Mr. Öpik: I shall take the Secretary of State's advice and ignore the comments on Procter and Gamble, which realised that there was a marketing opportunity in being serious about the environment. The same is true for the Welsh assembly and for all of Wales.
We should remember that Wales, particularly rural Wales, is experiencing difficult times economically—it is perhaps even in a deep recession. In the past two months, we have lost almost 100 jobs in Montgomeryshire. Therefore, there is a most urgent employment and economic aspect to including environmental considerations in decision making. Perhaps we could tie in our work on the environment with job creation. However, I shall not dwell on that matter, as it diverts from the main point dealt with in this group of amendments and new clauses.
We should remember also that we are not debating sustainability simply as a nice-to-have policy: it will crucially determine our descendants' quality of life. If we do not wake up to the fact that, as a society, we must include sustainability in our strategic outlook, we shall—at the very least—bequeath serious problems to future generations, and they will have to pay dearly to clean them up.
Wales has great opportunities in many spheres such as energy, which has already been mentioned in the debate. I whole-heartedly support any suggestions that hydroelectric and solar energy should be pursued emphatically as alternative energy sources.
I must now refer to wind power, which—although it has a place—has been non-strategically implemented. In Montgomeryshire, we have had the most terrible divisions in local communities, for the simple reason that wind turbines are a form of pollution. It is incorrect to suggest that there is no social or environmental cost to covering hillsides with wind turbines. I recognise that there is benefit in having a sensitive approach to wind farm power generation, and there might be some creative solutions that offend no one—for example, coastal farms could make a substantial contribution. However, we should make it clear that a visual scar on a hillside should be regarded as every bit as damaging as some other forms of environmental pollution.
The hon. Member for Ribble Valley (Mr. Evans) made some good points about noise and other concerns. It may not always be possible to quantify them in financial terms,


but if we are serious about sustainable energy production, we must also be serious about taking into account the more unusual consequences of investing in, for example, wind turbines. There are also some concerns about safety. I am currently holding discussions with at least one of the wind farm companies, because there was recently a fire at a wind turbine. I dwell on that point only because I do not want the Committee to be misled into thinking that there are no social or environmental consequences of wind farm generation. Having said that, I believe that it is appropriate for the Welsh assembly to consider how best to mix its energy generation solutions in the context of a green Welsh agenda.
We sometimes forget that if we could reduce the need for energy, we could adopt an even more sustainable approach. We could have greatly reduced our energy needs in the United Kingdom, as could western society as a whole, if, in the early stages of planning buildings and an integrated transport system, we had thought of the environmental consequences of what we were doing. In that sense, we should encourage the Welsh assembly in its deliberations on sustainability to adopt a formal strategy for reducing energy requirements across Wales, thereby obviating the need for quite so much energy production.
In the context of sustainability, I shall deal briefly with transport, brown-field development and agriculture. We all agree that we must create an integrated public transport system, and I applaud Ministers' comments in that regard. I must point out, as I always do when I mention transport, that there are potentially substantial environmental benefits to be gained from having an integrated air network across Wales. A well-used twin-engine commercial aircraft can use less energy getting people from north to south Wales than a car, which is probably the alternative.
It goes without saying, of course, that any such network would be guaranteed success if it used what I hope will one day be Welshpool international, or at least regional, airport. I have nothing but praise for Ministers' enlightened attitude to that proposal, which I have made many times.
We have discussed various aspects of creating a sustainable economy in the countryside. As I said at the beginning of my remarks, it is vital to recognise that the crisis in agriculture also presents Wales with an opportunity to invest in agri-environmental schemes, which might create not only jobs but a sustainable agri-environmental strategy. I hope that the Welsh assembly will be absolutely wedded to the idea of creating a more sustainable agricultural environment.
We might even recognise that having a sustainable environment in the countryside might not mean having the most efficient system in terms of the number of people employed on the land. We might want to increase the number involved in producing food, on the basis that that might be the most sustainable way to run the countryside.
I deal now with brown-field sites. I agree with hon. Members who have suggested developing the perhaps slightly more expensive brown-field sites rather than running to the countryside when we need new buildings and areas for industry. I must sound a word of caution, however. Our policies for sustainability have to recognise

that some development on green-field sites is necessary. We have to strike a careful balance between the need for rural housing and the necessity of not giving in to the temptation to build on green-field sites when brown-field sites are available.
Finally, I shall cite a rather persuasive document provided by the Royal Society for the Protection of Birds. It states that sustainable development
means pursuing those options for development which maximise the benefits for present and future generations.
It goes on to mention the quality of life, an integrated approach and landscape improvement. All those things underline the importance of taking account of the big picture. We must think of the environment not as a separate issue, but as one which should affect all the work of the assembly.
New clause 38 will greatly improve the Bill. Proposed subsection (6) states:
After each financial year of the Assembly, the Assembly shall publish a report of how its proposals as set out in the scheme were implemented in that financial year.
They are perhaps the most important words that we are debating. I should like to think that they are our insurance policy, to ensure that the Bill's provisions do not simply end up as more rhetoric about the environment, but are implemented.
The future will be our judge, but we have a great deal to be responsible for at this point. We must ensure that the Welsh assembly cannot run away from some of the difficult decisions that it must make with regard to the environment. If we carry out the actions that go with our fine words, we have a good chance of achieving the dream of the hon. Member for Ceredigion, which is to create an attractive brand image of Wales as a green and pleasant place.

Mr. Martin Caton: Like all hon. Members who have spoken, I warmly welcome new clause 38. The requirement on the assembly to carry out its functions with
due regard to the principle that sustainable development should be promoted
is an historic measure in the constitutional history of this country.
Sustainable development has become one of the buzz phrases of the past decade. Like much terminology that becomes fashionable, it is in danger of losing its real meaning in knee-jerk repetition. The thought discipline and philosophy that gave birth to the concept risk being lost behind the jargon. People legitimately ask, "Are there theories at the bottom of your jargon?" To be honest, one of the problems with sustainable development might be that there is a whole family of theories at the bottom of our jargon.
Definitions range from "an intention to maintain and even accelerate economic growth, while seeking to protect the environment as far as possible" through to "a commitment to leave future generations with the same capacity as now for improving human well-being by living within this planet's environmental limits". Like the hon. Member for Ceredigion (Mr. Dafis), I think that we should be aiming to move towards the latter. However, despite the breadth of interpretation, I would not want to narrow the term "sustainable development" any further in the Bill.
I believe that it will be up to the assembly clearly to identify its objectives for environmental protection and improvement when it establishes the scheme that the new clause requires. It will then be up to Members of the Assembly to make sure that, in every aspect of their work, their environmental objectives, as set out in the scheme, are adhered to.
The annual report, to which the hon. Member for Montgomeryshire (Mr. Öpik) referred, is an important safeguard for ensuring that the sustainable development scheme is more than just fine words, but I hope that the assembly will consider developing further mechanisms for keeping environmental sustainability at the heart of its decision making. I hope that it will look to develop means of measuring every action that it proposes to take against its sustainable development policies—a sort of environmental impact assessment for every proposal.
It is vital that the assembly finds a way in which to hold sustainability at the centre of all policy making, because the subject and service areas for which the assembly will have responsibility are some of the most important in terms of environmental protection and improvement: agriculture, forestry, fisheries, economic development, highways, housing, transport, industry, tourism, planning, water and flood defence, and health. Almost all the policy areas that will be dealt with by the subject Committees of the assembly are crucial for the future of the environment in Wales and for ensuring that our contribution to the global environment is positive. The new clause provides us not only with theories at the bottom of our jargon, but with the basis for best practice.

7 pm

Mr. Letwin: The hon. Member for Ceredigion (Mr. Dafis) spoke, as the Committee would expect, powerfully and thoughtfully about sustainable development. Like many other Conservative Members, I greatly sympathise with his argument. Listening to the debate, however, one would have thought that we were talking about certain matters of substance, not about a constitutional Bill which will establish a set of bodies.
Amendment No. 517 and Government new clause 38 illustrate beautifully the problem that the Government face. As my hon. Friend the Member for Ribble Valley (Mr. Evans) said, new clause 38 is a slight but admirable restriction of the sort that might be applied to a local authority. Amendment No. 517 moves in the opposite direction. Although the arrow of the hon. Member for Ceredigion is excellent, he aims at a target that I think he would dislike if he contemplated it further, as the amendment would further extend the scope of the Welsh Development Agency.
Who would run what and who would pay for what in terms of sustainable development if, as the hon. Member for Ceredigion suggests, both the amendment and the new clause were agreed to, or if, as is more likely, only the new clause were accepted? Under clause 80, the
Secretary of State shall from time to time make payments to the Assembly … as he may determine.
He will be the all-powerful paymaster of the assembly. Under the Welsh Development Agency Act 1975, the Secretary of State and the Treasury can grant unlimited borrowing powers to the WDA.
What will happen if the WDA chooses to move in a direction, in terms of sustainable development, wholly opposite from that of the United Kingdom Government

and the Welsh assembly, regardless of whether the assembly is constrained by new clause 38? Which body will prevail in this hypothetical case? Manifestly, the United Kingdom Government will prevail, as the Secretary of State and the Treasury will be able to ensure that their favoured policy is pursued through the WDA; they will fund the agency through the borrowing power and deny funds to the assembly.
Before we debated these measures, I had naively understood that the Government wanted to avoid creating a quangocracy. However, the Bill will allow a quango, based on the great powers retained by the Secretary of State and the Treasury, to fight against an ostensibly democratic institution, which, because it will be limited by the new clause as if it were a local authority, will be entirely subject to the fiscal powers of the Secretary of State and the Treasury.
In those circumstances, the assembly will be the loser, which might not be a bad outcome for those of us who favour the integrity of the United Kingdom. However, if the democratically legitimate body opposes the quango, which is the servant of the UK Government, there will be a devil of a fight, and the matter may be referred to our old friend the Judicial Committee of the Privy Council as a devolution issue. Who, in such circumstances, will genuinely hold the power over sustainable development in Wales?
The Secretary of State may shake his head but, given that the Minister spent little time on this question earlier, it would help the Committee if, instead of concentrating on the important matters of substance—which, in fact, will largely be for the assembly to debate at a later date—he said who will be in charge of this domain, regardless of whether new clause 38 is accepted.

Mr. Paul Flynn: The hon. Member for West Dorset (Mr. Letwin) repeats the depressing cry that we have often heard from the Conservative Benches—that every situation that could arise when the Senedd is established will lead to conflict, and not, as we believe, to co-operation. People throughout Wales will be happy to see the new clause included in the Bill. By voting for the parties that currently represent it in the House of Commons, Wales has taken a great lead in understanding the need for sustainability.
This weekend, there will be a conference in Merthyr to commemorate the 16th anniversary of a remarkable declaration by the people of Wales speaking with one voice. Every county council, representing the entire population, resolved to make Wales a nuclear-free zone. That was long before the decision was taken elsewhere. Democratic Wales had spoken, and if it had spoken on other issues at the time, it would have made a similar resolution about sustainability. The man who took the declaration to Strasbourg has now become immensely successful—and possibly prosperous—in organic farming in Ceredigion.
When I heard what the Estonian Biggles, the hon. Member for Montgomeryshire (Mr. Öpik), said about sustainable air flights in mid-Wales from the Heathrow at Welshpool that is bound to be developed, I was fascinated by the prospect.
Sustainability is understood in Wales. Labour Members share the fears about the future for farming, especially as we face a particularly difficult problem in Wales. If we


lose the small farmers, we lose the language, which is a terrible threat. Labour Members support the Government's policy, as we realise that, although many of the changes in farming are painful, they are inevitable—there is a shrinking market for many products. Nevertheless, we want small farms to be preserved, as they have a special cultural importance to Wales.
I urge farmers to achieve sustainability by planting new crops and farming organically. The British Isles imports 60 per cent. of its organic products. Moreover, organic farming is highly labour intensive, and it works well in areas without especially promising land. Several farms in remote communities in Ceredigion have, despite a difficult start 20 years ago, defied all the critics and been prosperous and successful. Why cannot farmers realise that they can cultivate other harvests, which have a future? I am thinking, for example, of flax and hemp, which has unique properties other than those that prompt people's desire to smoke it—farmers could plant hemp with non-addictive qualities and low-quality THC.
The new clause will muster great support. It will give the assembly a new impetus and role, and express what Wales has shown that it can do when, on those rare occasions, it speaks with a united voice. We want to ensure a sustainable future that will be in harmony with nature.

Mr. Ron Davies: I hope that my hon. Friend the Member for Newport, West (Mr. Flynn) will forgive me if I do not follow him down the path of the prospect that he opened up. When he was describing the growing conditions in remote farms in Ceredigion, I suspected that he would suggest some novel crops—I was not disappointed. However, I would get into difficulty with my Cabinet colleagues if I suggested that the sole purpose of devolution, was to bring about a different policy in Wales on growing cannabis. Nevertheless, I welcome my hon. Friend's support.
The term "historic" has been used several times this evening, and I must use it again. The debate has been historic. The policy advocated by the Government has been endorsed not only by the spokesperson for Plaid Cymru—or should we now call it Plaid Newydd?—and by the Liberal Democrats but, I was astonished to note, by four of our own Back Benchers. In our debates on devolution, that is a rare and welcome occurrence. Moreover, not only did four of our Back Benchers speak in support of Government policy, but not one spoke against it. This truly is a historic debate.
I welcome the contribution by the hon. Member for Ribble Valley (Mr. Evans). In the absence of the right hon. Member for Devizes (Mr. Ancram), he found himself waxing eloquent in favour not only of the Government's policy in new clause 38 but of the assembly.

Mr. Evans: indicated dissent.

Mr. Davies: The hon. Gentleman spent several entertaining moments telling us of all the great benefits that would come to Wales as a result of the assembly. Indeed, during the referendum campaign not even the Under-Secretary, my hon. Friend the Member for Neath (Mr. Hain), in his most enthusiastic of speeches, would

ever have dared suggest that if we voted yes on 18 September we would be able to bring back the Mumbles railway, yet it appears that that is the conclusion of the hon. Member for Ribble Valley. We welcome support from whichever quarter it comes. The hon. Gentleman is a late convert to the cause of devolution, but he is an enthusiastic one, and he is welcomed as such.
The debate was opened by the hon. Member for Ceredigion (Mr. Dafis). I am grateful for the way in which he spoke. Of course he has a great and deep conviction on such matters and he has argued his case consistently, as he did this evening. Later, I shall answer some of his specific questions.
My hon. Friend the Member for Vale of Clwyd (Mr. Ruane) was supportive and gave us some good examples of how the Welsh assembly, in pursuance of the duty placed on it, will be able to give expression to the principles of sustainable development. He made it clear that he regarded the principle of protecting the environment as an important, but not exclusive, part of sustainable development.
I welcome the support of my hon. Friend the Member for Cardiff, North (Ms Morgan). She was right in her assertion that sustainability must now be at the heart of politics. What we can do, as we frame the legislation, is to place the duty on the assembly. However, as my hon. Friend the Member for Gower (Mr. Caton) said, it is those in charge of the political process who must develop the politics and policies to give expression to the duty that we shall lay on the assembly to have regard to the principle of sustainable development.
My hon. Friend the Member for Cardiff, North asked three questions. She asked whether we would set targets and whether there would be a forum for the matter to be discussed by the assembly. The answers, of course, will be a matter for the assembly. What we shall do is to place a duty on the assembly. My hon. Friend's third question was what precisely that meant. I refer her to new clause 38(1), which makes it clear that the new clause will impose a duty on the assembly to have regard to sustainable development in the exercise of all its functions.
The hon. Member for Montgomeryshire (Mr. Öpik) raised that point too, and I agree with what both he and the hon. Member for Ceredigion said about the branding of Wales. It is important that, at the heart of the new Wales that we want to create, we put the idea of respect for the environment and for the principles of sustainability. Both transport and agricultural systems should work with the grain of the environment and according to the principles of sustainability.
Several hon. Members have gently teased me about the site of the assembly. I know that it will come as a great surprise and regret to the hon. Member for Ribble Valley when I say that I shall not tell him this evening the outcome of our consultation and discussion process.
I can make one important announcement to the Committee. I know that everybody will be greatly interested to know that the assembly will not be on a green-field site. As colleagues who have followed our deliberations carefully will know, all the sites under consideration are brown-field sites, so that information will not come as a great surprise.
I am afraid that the hon. Member for West Dorset (Mr. Letwin) rather spoiled the debate, which was well informed and considered until his intervention. I am sorry


about that. The substance of his contribution is something for the hon. Member for Ceredigion to take up, but he also returned to the idea of trying to raise conflict all the time.
I genuinely suggest that the hon. Member for West Dorset has have chat with the converts who now sit on the Opposition Front Bench. They will be able to explain to him that the idea of eternal conflict being institutionalised into our constitution is fantasy. The new arrangements will not work like that.
The hon. Gentleman asked the question about the Welsh Development Agency in our previous debate, and my hon. Friend the Under-Secretary, in reply to that debate, told him the position.

Mr. Letwin: He did not.

Mr. Davies: Of course he did. The position is clear. The responsibility for funding the Welsh Development Agency will pass to the assembly, as will the responsibility for laying down the strategy for the agency. The responsibility for monitoring the WDA will also pass to the assembly. There is no possibility whatever of a conflict developing between the wishes of the Secretary of State and those of the assembly, because the Secretary of State's responsibilities in respect of the WDA will have passed to the assembly.

Mr. Letwin: Will the external financing limit powers under the 1975 Act pass to the assembly?

Mr. Davies: The responsibility for funding the assembly now rests with the Secretary of State. The funding for the Welsh Development Agency comes out of the block grant. Under the new arrangements, it will be the responsibility of the Secretary of State to consider the expenditure that is necessary and appropriate for the Welsh assembly in the exercise of all its functions. It will then be a matter for the assembly itself to decide what proportion of the grant that it is given shall be allocated to the Welsh Development Agency.
As for raising the WDA's external financing limits, the hon. Member for West Dorset will know that, about 12 months ago, the Conservative Government passed an amendment to the provisions, to allow an increase by means of secondary legislation. That power will pass to the assembly.

Mr. Letwin: I am grateful to the Secretary of State; he may actually be helping me. Is he saying that, from now on, the agency's external financing limit will be a matter not for the Treasury but purely for the Welsh assembly?

Mr. Davies: When the assembly is established, in more than 12 months' time, it will be for that body to decide how to use the powers that it has been given. The hon. Gentleman is now asking a particular question about the Treasury's residual role. My present understanding is that the ability to raise the financing limit of the Welsh Development Agency will pass to the assembly, but the hon. Gentleman is asking a specific question—[Interruption.] I am trying to deal with the hon. Gentleman on the basis of the information that I currently have.
My understanding is that the responsibility will pass to the assembly. If there is any requirement for the assembly to seek approval from the Treasury, I shall write to the hon. Gentleman and let him know. Without having had the opportunity to check, it is my understanding that such consent will not be required, but I shall write to the hon. Gentleman and let him know.

Mr. Rowlands: rose

Mr. Davies: I shall give way to my hon. Friend, but I want to return to the substance of the debate now. I do not want to be sidetracked into the funding of the Welsh Development Agency, because we have already had a lengthy debate on that subject.

Mr. Rowlands: As I recall, we recently changed the legislation. Originally any increase in the borrowing powers of the WDA required primary legislation, but now that can be done through an order-making power.

Mr. Davies: That is precisely the point that I just made in answer to the hon. Member for West Dorset.
If there are any questions that I have not answered—apart from those asked by the hon. Member for Ceredigion—I apologise. If there are hon. Members who feel that I have omitted to respond to their questions, perhaps they will let me know and I shall attempt to deal with them in correspondence.
I shall talk about our new clause 38. It is appropriate that the hon. Member for Ceredigion who, as I said earlier, has a long record in such matters, has provided us with the opportunity to debate sustainable development as part of our proceedings on the Bill. I agree with the hon. Gentleman that sustainable development is about ensuring a better quality of life, both now and for generations to come. I also agree with his definition of sustainable development, which encompasses economic, social and environmental goals. It is concerned with achieving economic growth, while protecting and, where possible, enhancing the environment. It is about making sure that those economic and environmental benefits are available to everyone and not just to a privileged few. Sustainable development is about a new and integrated way of thinking that influences choices across government and throughout society.
The Government have committed themselves to placing the environment at the heart of their policy making and are engaged in a wide-ranging consultation process which will lead to a revised strategy for sustainable development. The hon. Member for Ceredigion raised that point and I assure him that it is my desire that that development work should continue between now and May next year, so that when the assembly is established much of the preparatory work will have been done.
Paragraph 1.24 of the devolution White Paper states:
The Government will … ensure that the Assembly … promotes sustainable development".
On 8 December last year, I told the House that one of the Government's amendments would
most certainly place a duty on the assembly to have regard to the principle of sustainability."—[Official Report, 8 December 1997; Vol. 302, c. 752.]
The new clause gives expression to that intent and I am genuinely grateful for the wide support that it has received from all parties represented in the Chamber.
New clause 38 meets the commitments that we have given. It places the assembly under a duty to publish
a scheme setting out its proposals for securing that its functions are exercised with due regard to the principle that sustainable development should be promoted.
The hon. Member for Ceredigion was quite right when he said that here was a case of Wales breaking new ground. No such duty applies to the UK Government in exercising their executive functions or to the UK Parliament in framing legislation.

Mr. Dafis: New clause 38(1) is somewhat convoluted and there appear to be several stages between the words "scheme" and "sustainable development" where the whole process might fall down. Are we talking about the assembly drawing up a sustainable development strategy for Wales?

Mr. Davies: The hon. Gentleman has to accept that the wording of new clause 38 makes it clear that the assembly will have to draw up a scheme, just as the Welsh Language Board requires public authorities in Wales to draw up schemes. The question of strategy is a wider matter and it will be for the assembly to decide that for itself through the development of its policies. It will want to develop separate strategies for sustainable development in the countryside, for sustainable development of transport policy and for sustainable economic development generally, and those strategies will inform all aspects of assembly policy.
What we are talking about here is a statutory duty to be placed on the assembly to produce a scheme to give expression to the desire that it should promote sustainability across all of its functions. That is the scheme; the strategy will be the way in which the assembly develops all of its policies, and that is a matter for the assembly and the elected representatives who sit in it.

Mr. Dafis: Will the Secretary of State confirm that, in reality, the scheme will amount to nothing if it does not generate, or oblige the assembly to generate, a strategy? He spoke of several strategies, but surely those would have to be encompassed within an overall strategy, which the UK Government already have and which Governments all over the world were obliged to draw up after the Rio agreements?

Mr. Davies: No, I do not accept that interpretation. It is clear that there will be a requirement on the assembly to produce a scheme. That scheme will have to be published, subjected to the normal processes of accountability and reviewed regularly, so it cannot be set aside, as the hon. Gentleman suggests would be possible. The assembly will have had that duty placed on it. However, I acknowledge that what counts will be the enthusiasm with which the political parties that contest seats in the assembly embrace the principles of sustainability. It will be their policies, for which they will seek the electorate's approval, that will determine how successful and meaningful the scheme becomes.
I agree with the hon. Gentleman that this is a case of Wales breaking new ground. No such duty applies to the UK Government in exercising their executive functions or

to this Parliament in framing legislation. The scheme that the assembly must prepare will extend across all its functions, although—this is the point raised by my hon. Friend the Member for Cardiff, North—obviously the "due regard" to be given to the principle of promoting sustainable development may vary from function to function. As the hon. Member for Montgomeryshire said, there will be a need to develop strategies for transport, for agriculture, for economic development in the countryside, and so on. The assembly will also be under a duty to keep its scheme under review and to publish an annual report setting out how its proposals in the scheme were implemented in each financial year.
The other amendments in the group express Plaid Cymru's concerns for the environment in Wales and the wish to ensure that all economic development is sustainable. Naturally, the Government prefer their own provision, new clause 38, to new clause 18, although there are similarities between the two.
New clause 18 raises the additional point that the assembly should review annually
the implications for Wales of any relevant quantitative targets for the United Kingdom set by Parliament or by Ministers of the Crown.
That recognises that there are policies that affect sustainable development in Wales over which the assembly will have no control, because they will continue to be dealt with by the UK Government—for example, taxation issues, such as the level of duty on petrol and value added tax on domestic fuel. When he opened the debate, the hon. Member for Ceredigion asked whether schedule 4 should be extended to include Opraf. I shall consider that question and, when I have taken advice, I shall get in touch with him.
In exercising its functions, the assembly will need to have regard to the international obligations into which the UK has entered, for example, after the Rio and Kyoto summits. However, it is unnecessary for the Bill to refer explicitly to such matters, as the assembly could take account of them in framing its scheme under new clause 38.
The Welsh Development Agency is required under existing legislation to further the improvement of the environment in Wales. The overarching requirement on the assembly to have due regard to sustainable development will inform the strategic guidance and targets that it sets for the agency. That and the agency's own governing legislation are sufficiently robust to ensure that environmental concerns are taken into consideration by the agency in the exercise of its functions. Given those two additional provisions, the Government's view is that amendments Nos. 517, 518 and 522 are unnecessary.
New clause 37 provides for a board member of the agency to be assigned specific responsibility for environmental sustainability. I can say only that that has to be an organisational matter for the agency. The hon. Gentleman asked whether I had received any representations from the agency in respect of that matter and the answer is, no, I have received no such representations. I have recently announced to the House of Commons that I shall appoint members to the agency on the basis of fair and open competition. I shall not make any predecisions, but I hope to be selecting from a pool of candidates with a wide range of skills and experience, so I hope that someone on the board will have a measure of experience and competence in this area. It will then be for the agency itself to assign particular responsibilities to individual members.


On the basis of the reassurances that I have provided in respect of the assembly and the Welsh Development Agency, I hope that the hon. Member for Ceredigion will ask leave to withdraw his amendment.

Mr. Dafis: I am grateful to the Secretary of State for his response and I have enjoyed the debate. The amendments have served their primary purpose, which was to give us an opportunity to debate sustainable development. It is good to know that there is widespread support for the principle and that the idea that the assembly should take sustainable development as an informing theme and that Wales will do so has been widely accepted here. I certainly acknowledge that the Government's new clause will ensure that the issue is high on the assembly's agenda when it meets, which is very important.
The debate has been useful, although not all of it has been well informed. The debate about energy illustrated the need for people to become much more well informed about the options that we face on energy supply. No development is without its impact. If we talk about dispersed development—which sustainable development is, by definition—the visual impact will be real, although much less than the visual impact that exists in our environment. I had better leave it there. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Mr. Llwyd: I beg to move amendment No. 520, in page 56, line 13, at end insert—
'(2A) After subsection (2) there shall be inserted—
(2A) The Agency shall establish a department with the responsibility of drawing up and ensuring the implementation of, policies in furtherance of the purposes set out in subsection (2) appropriate to rural areas.".'.

The Second Deputy Chairman of Ways and Means (Mr. Michael Lord): With this, it will be convenient to discuss the following amendments: No. 524, in clause 121, page 56, line 40, leave out from beginning of line to end of line 2 on page 41 and insert
'be transferred to the Welsh Development Agency.'.
No. 525, in clause 122, page 57, line 6, leave out 'cease to exist' and insert 'are transferred.'.
No. 526, in clause 123, page 57, line 19, leave out 'or Schedule 11.'.
No. 527, in page 57, line 21, leave out 'cease to exist' and insert 'are transferred.'.
No. 528, in page 57, line 28, leave out 'cease to exist' and insert 'are transferred.'.
No. 529, in page 57, line 33, leave out 'cease to exist' and insert 'are transferred.'.
No. 530, in page 57, line 41, leave out 'cease to exist' and insert 'are transferred.'.
No. 531, in clause 124, page 58, line 2, leave out 'and Schedule 11.'.
No. 532, in page 58, line 11, leave out 'cease to exist' and insert 'are transferred.'.
No. 533, in page 58, line 13, leave out 'cease to exist' and insert 'are transferred.'.
No. 534, in page 58, line 16, leave out 'cease to exist' and insert 'are transferred.'.
No. 535, in page 58, line 22, leave out 'cease to exist' and insert 'are transferred.'.
No. 536, in page 58, line 25, leave out 'cease to exist' and insert 'are transferred.'.
No. 537, in page 58, line 35, leave out 'cease to exist' and insert 'are transferred.'.
No. 538, in page 58, line 40, leave out 'cease to exist' and insert 'are transferred.'.
No. 539, in clause 125, page 59, line 11, leave out `ceasing to exist' and insert 'being transferred.'.

Mr. Llwyd: Amendment No. 520 is straightforward, saying, in other words, that there should be a Department charged with formulating policies of relevance to the rural economy.
I wish to draw attention to amendment No. 524. Clause 121 currently reads:
The functions of the Development Board for Rural Wales shall cease to exist.
The amendment is a probing amendment. I believe that the functions do exist, but I accept that, if it is meant in terms of functus officio, that it is a right and proper use of the word. I would prefer the Bill to refer to the transfer of those functions to the new body, which would secure the position. The Minister, being a Latin scholar, will no doubt deal with this point in due course—or perhaps not.
I ask the Government to consider my proposal that the word "transfer" is preferable to the phrase "cease to exist". Surely the functions are still very much in existence—perhaps more than ever in view of the agriculture crisis. The Minister should give thought to that matter in his response.
Many people in rural areas in Wales are worried because of the changes occurring in the agencies charged with ensuring the economic development and well-being of rural areas. I speak as a Member representing a constituency which was very well served by the Development Board for Rural Wales. Other hon. Members in the Chamber were equally well served by that board, and they have shown in the past, and will show in the future, their concern about this matter.
People who live in mid-Wales have for some time enjoyed great assistance from the Development Board for Rural Wales, a body specifically set up to tackle the problems of rural Wales. Over the years, the board amassed considerable expertise and experience. The task of economic regeneration in rural areas is far more difficult, and requires more application and creativity than in an urban area, where at a stroke of a pen—frequently on a cheque—many hundreds of jobs can be created.
Many of us look with envy at the recent developments in north-east and south-east Wales. Who would not accept 6,000 new jobs at a plant such as LG at Newport? That underlines the dichotomy. In that instance, 6,000 jobs were created, thus having a dramatic effect on the unemployment figures and the economy of that area—which is to the good. To create 6,000 jobs in rural areas is, by comparison, a mammoth task. A more sympathetic approach is required, together with an intimate knowledge of the needs and requirements of rural areas.
One grave concern is the fact that WDA and the Development Board for Rural Wales moneys have been used to bring in such plants as Sony and LG, but, without being niggardly—I do welcome their arrival—I must question what price has been paid for their success. There is no doubt that, proportionately, far higher spending has occurred in the eastern areas of south Wales and in the industrial eastern area of north Wales than in the rest of Wales. By and large, the rural areas of Wales are and have been let down.
I am not saying that that was in any way intentional, but the budget was finite, and a great deal of money was taken out of the overall cake and went into some of those schemes.

Mr. Gareth Thomas: Does the hon. Gentleman believe that the lack of democratic accountability and transparency in the development of economic policy in Wales may have had a bearing on the fact that there has been an imbalance not only between east and west, but between rural and urban, and between small businesses and large projects?

Mr. Llwyd: The hon. Gentleman makes a good point, and he may be correct. I am hopeful, as he will be, that the new set-up under the assembly will put paid to that aspect, and will introduce a more equitable distribution of funding for inward investment throughout Wales.
I know that political influences can come in to play, as I almost lost a plant in my constituency. I prefer not to give all the details, but I was called at the eleventh hour to try to save the plant. The persons running the plant were told that, if they relocated to Breconshire, everything would be fine and they would have all the money they needed. In Bala, they could not have it. It was only by sheer good fortune that I intervened. A local councillor in Bala rang me that evening, and, the following morning, that was reversed. There was an admission that some skulduggery was afoot, and I hope and pray that the assembly will ensure that that kind of nonsense will not recur.
Several of us campaigned for a change of direction in terms of funding of the agencies in Wales as there was an acknowledged imbalance between east and west. For example, the hon. Member for Swansea, East (Mr. Anderson) said last week that, for every £1 spent on job creation and inward investment in the Swansea area, £5.25 was spent in Cardiff. We now know that the WDA agreed to expend a moiety of its inward investment budget in the western areas of Wales. That was agreed last year, and sanctioned by the Welsh Office. That was announced and it was most welcome, especially to those of us who had campaigned for it.
However, it shows that different parts of Wales were dealt with differently. Following the LG announcement, the Welsh Development Agency and the Development Board for Rural Wales received savage cuts to their budget. To put it simply, some money had to be obtained to honour the cheque that was paid to bring in those new plants. There is great anxiety throughout Wales that such inward investment is brought in at too high a price—certainly at a very high price to rural Wales. In my view, that imbalance must be addressed, and I am sure that many hon. Members share my unease. We must all ensure that every part of Wales receives its fair share.
I always use the word "inclusiveness" in these debates. I always feel obliged to do so, as Ministers always do. If it is to mean anything, we must ensure that it means an equitable distribution of all moneys throughout Wales; I am sure that that will be a guiding principle of the national assembly.
However, rural Wales has extra problems, for the reasons that I have given, and because it is a far more difficult task to create growth in the small and medium sector than in large enterprises. We have the problems of remoteness. Infrastructure is inadequate. The sparsity factor is of great importance, and that translates into a higher cost of delivery of services, especially in remoter areas.
The Bill provides for the creation of a powerhouse—a new body which will be an amalgam of the Welsh Development Agency, the Development Board for Rural Wales and the Land Authority for Wales. That is acceptable, but the loss or dilution of the expertise that was possessed by the Development Board for Rural Wales should never be acceptable. Some of the worries in that sphere have been identified by many Welsh bodies in the past few months.
For example, the Country Landowners Association in Wales briefed various hon. Members a few months ago. I shall quote briefly from a letter that it wrote. The association questions whether the assembly's
procedure for determining and managing its spending priorities
will recognise and protect the special needs of rural Wales. It questions whether there will be sufficient
provisions to ensure that the advice of the regional committees will be heard in the Assembly".
It seeks an assurance that the enlarged new authority, having taken over the functions of the Development Board for Rural Wales,
will address the particular needs of rural areas".
The association also sought assurances that the subject and executive Committees of the assembly and the board of the WDA would have rural representatives. That is very important.

Mr. Tam Dalyell: Pardon an intrusion from a Scot. Much of this is familiar, but what can a Welsh assembly do to overcome the very real problem that the hon. Gentleman outlines that enlightened Ministers in the Welsh Office cannot?

Mr. Llwyd: I believe that the basic problem has been the tug of war between the Department of Trade and Industry, the WDA and the Welsh Office. We all know that it has been going on behind closed doors, and we know that there is a finite budget, even in a Welsh context, but equally in a United Kingdom context. There has been far too much toing and froing, and far too much of that tug of war between Departments.
At least when we have a national assembly, there will be no tug of war within that body. I hope that, within the assembly, there will be an overall view of the needs of the whole of Wales, and I trust that the assembly will be guided by expert committees on the needs of rural areas and so on. Does the hon. Member for Linlithgow (Mr. Dalyell) wish to raise another point?

Mr. Dalyell: Is not the proposed Welsh assembly stretching the goodness of human nature rather far?

Mr. Llwyd: That is not an unusual comment from the hon. Gentleman. He has been saying that for 25 or


30 years. I say that with respect, because I have a great deal of respect for him. I have heard it said that the assembly might well be a cure for flu, and I have heard other people say that, if we had had an assembly, we should not have had the miners' strike.
Surely, with respect to the hon. Gentleman, it is not beyond the ken of any type of national assembly to address the real economic needs of rural and urban areas. I realise that finance will be needed, but at least we shall not have this tug of war, which has taken much time and energy.
I remember, with my right hon. Friend the Member for Caernarfon (Mr. Wigley), arguing with the late great right hon. Member for Wokingham (Mr. Redwood), who at one time walked the streets of Cardiff very occasionally. The first thing we discussed with him after he became Secretary of State for Wales was the idea of giving a new development status to the southern part of my right hon. Friend's constituency and the northerly part of mine, following the closure of a large plant. Everyone, including the Welsh Office, seemed to support that proposal, but it was stopped at the last minute by the Department of Trade and Industry. I hope that that type of thing will not happen when we have the national assembly. It is inconceivable to me that it will happen.
I realise that there is a finite budget, and that there will be a certain amount of creative tension regarding that budget, as there is in the setting of priorities, but at least we shall do away with that time-wasting exercise.

Mr. Wigley: My hon. Friend mentioned one example of difficulties with the DTI. He will remember that, as recently as last year, Steven Spielberg wanted to make a film in Wales. The Welsh Office supported the idea, but unfortunately it could not carry other Government Departments with it, and the film was made in Ireland. Surely, in a similar situation, we should have much more clout with our own assembly.
On rural or urban matters, a consensus can be achieved in the Welsh Grand Committee on what is needed in Wales—a consensus that cannot be achieved on the Floor of the House. I believe that, in our own national assembly, there will be an opportunity for a consensus in a Welsh context that, unfortunately, we cannot get within the existing structures.

Mr. Llwyd: I am grateful to my right hon. Friend. Needless to say, I agree with what he said.
To return briefly to what I said earlier, I believe that it is highly desirable that the national assembly has an explicit duty to promote and sustain the interests of rural Wales. Rural Wales amounts to more than 85 per cent. of the land mass of the country, and Wales has a very strong rural character.
I shall not repeat an argument made some weeks ago, but the Environment Act 1995 sets a clear precedent. Under the 1995 Act, national park authorities have a duty to foster the economic and social well-being of local communities, and to co-operate with public agencies whose functions include the promotion of economic and social development in their areas.
Surely we cannot leave the situation as it is. It is a very, very important—indeed, all-important—remit, and if we merely leave it to the area committee structure, we shall

fail the people who voted in favour of the national assembly. I believe that there must be a thorough appraisal of current thinking and current policy in creating sustainable economic and social development in rural areas.
The Government have responded positively to many of the far-sighted suggestions of my hon. Friend the Member for Ceredigion (Mr. Dafis) about sustainable growth. Surely what I am now suggesting is part and parcel of the same important debate.
We are in the teeth of a fierce storm in agriculture. We know that there will be a change in the very near future, because common agricultural policy reform is imminent and the industry will have to change; of that we can be sure. However, our rural communities and rural economies will also have to change. It is vital that the national assembly is able, and is speedily given the right and the responsibility, to input policy suggestions into that discussion. I hope that there will be a subject Committee dealing with agriculture and rural development, as that would seem to be a sensible vehicle to assure sympathetic and effective development.
Recently, via the European Commission, the European Union issued a plan for agri-environmental policies and those dealing with the development of the rural economy to be brought within a single framework. The National Assembly for Wales would do well to emulate that move.
I hope that I have established that there is a vital need for forward thinking in terms of the rural economy. Agriculture is a central consideration, but so is transport infrastructure, the creation of sympathetic light industry, telematics, electronic infrastructure and agricultural diversification. There are numerous other important facets. I trust that the Government will look favourably upon the amendment, which would introduce into Wales the same sort of forward thinking exercised by the Countryside Commission in England.
I am not too proud to say that I would seek to borrow some of the commission's ideas—I would also like to borrow some ideas from the English rugby team—because they tackle a breadth of subjects regarding rural life and the economy. The commission deals with those issues very effectively under the one roof. Huge challenges will face rural Wales in the coming months and years, and they must be met. If we begin by giving the agency responsibility for addressing those issues, it will be a valuable step towards meeting that all-important challenge.

Mr. Gareth Thomas: In speaking in opposition to amendment No. 520, I acknowledge that it raises the converse of the issue explored so well by my right hon. Friend the Member for Llanelli (Mr. Davies) and my hon. Friend the Member for Merthyr Tydfil and Rhymney (Mr. Rowlands). They asked whether, under the enhanced WDA, there would be a lack of focus in terms not only of the industrial economy of Wales but of rural areas. I resist the amendment because I do not believe that it is simply a question of structure: it is more a matter of educating Members of the Assembly and Welsh citizens about the need to strike a balance between the treatment of rural and urban areas in Wales.
Establishing a regional affairs department, which is the subject of this amendment, will not of itself guarantee adequate funding or attention to rural areas. We must


accept that there is a risk with devolution that the role of the Secretary of State as an honest broker or umpire will be lost. However, hon. Members—including my legalistic friends on Labour Benches—and I support devolution because issues must be exposed to the light of day and debated openly.
One of the strengths of the Government's proposals is that they will allow genuine, open, democratic debate about issues that have arisen under the quangocracy fostered by the Conservative party for 18 years. The imbalance between north and south Wales in terms of economic development might be defined more precisely as an imbalance between west and east, as there is substantial inward investment in north-east Wales—especially along the A55 corridor. We must address that matter.
I welcome the establishment of the National Assembly for Wales as an opportunity to consider that issue openly and democratically. We must also address the imbalance of investment between urban and rural areas in Wales. If there is genuine, open debate, I feel confident that the quality of decision making will improve and that both rural and urban areas will feel well served by the new institution.
How does the Minister view the role of rural policy within the enhanced WDA? It seems that the Government are not minded to pursue a policy of ring-fencing funds for rural development. None the less, there must be some focus on rural areas. I would be interested to hear the Minister's comments in that regard. I would also be interested to hear his views about the issues raised by the hon. Member for Meirionnydd Nant Conwy (Mr. Llwyd).
Do the Government intend to require the WDA to comprise persons who have experience in agriculture and rural affairs? I am sure that the Minister is aware that that matter has caused great concern. I appreciate that the Government have adopted the legitimate position that they cannot be too prescriptive and tie the assembly's hands—after all, it is a democratic institution that will be capable of making its own rules and decisions. However, in view of the difficulties facing Welsh agriculture at present, some clarification or an idea of the policy would be appreciated.
I also seek clarification of whether the Government, through Standing Orders or some other means, will require the WDA to have regard to the requirements not only of agriculture and efficient land management—I refer to section 1(4) of the Welsh Development Agency Act 1975—but of the economic and social well-being of rural areas. I should be grateful if the Minister would clarify those issues.

Mr. Evans: I wish to make a short contribution in the guise of a few questions to the Minister. He will be delighted to learn that normal hostilities have resumed after new clause 38. I apologise for my raw voice, but I was at Twickenham on Saturday: never has so much energy been expended for no good purpose.
I asked earlier about the vital European Union regional aid that is channelled to rural Wales. What has happened in the discussions about revising the way in which that aid is calculated? The calculation is to be based only on unemployment, which will disadvantage whole swathes of

Wales in favour of other areas, including some parts of Spain, that are thriving. It could put a £1 billion hole in expenditure for Wales.
The Development Board for Rural Wales was established in 1977, and has successfully examined specific problems, such as depopulation in rural areas, and vital issues such as public transport, social housing and industrial investment in rural areas. It serves 40 per cent. of Wales. When the board is meshed into the super-quango, how will the Government ensure that its remit extends sufficiently to rural areas? A favourable reply would render these amendments unnecessary.
We must not lose sight of the reason why the Development Board for Rural Wales was invented. Rural areas must not be disadvantaged or forgotten because of extra demands on the WDA. Much has been said about LG coming to Newport and creating 6,100 jobs. That employment is vital—as is the spin-off of between 9,000 and 15,000 extra jobs—and the whole of Wales will benefit from it. Do the Government have any plans to bring the Wales tourist board within the remit of the Welsh Development Agency? Tourism is vital for rural Wales.
Another remit of the DBRW was its support for farming. Will that remit be taken on by the Welsh Development Agency? That question is particularly important in the crisis currently facing Welsh farming.
In an earlier debate, it was mentioned that the DBRW had a remit to steer a certain percentage of development away from the M4 and A55 corridors. That is extremely important, as there are parts of south-west Wales into which it is difficult to attract inward investment, whereas it is much easier to attract it into areas such as Newport and along the M4 and A55 corridors.
Can the Minister tell us what is to be the steer for the new super-quango? Will it be to ensure that a specific percentage of the inward investment that comes into Wales finds its way into rural areas, away from the main corridors? As new clause 38 deals with sustainable development, I assume that it is intended to allay fears for rural areas.
Having kept my contribution brief, I hope that that will leave a little more time for the Minister to cover those points.

Mr. Denzil Davies: I have considerable sympathy with the amendment which, as my hon. Friend the Member for Clwyd, West (Mr. Thomas) said, seeks to ring-fence rural affairs within the DBRW. For economic, cultural and social reasons, it would be a tragedy if the new quango neglected rural affairs. It may be unrealistic, as my hon. Friend suggested, to expect that the agency would ring-fence rural affairs.
I shall put two questions to my hon. Friend the Under-Secretary. First, what about the money? We are discussing not just a merger of three bodies—quangos—but an extension of powers. With regard to social development, there will be an extension of powers wider than the present Meirionnydd, Powys and Cardiganshire. Social development will go to all the rural areas outside that area covered by the development board, and to urban areas.
The new super-quango will have increased powers over those areas in that sphere. Will it have to make do with the same amount of money, plus annual increments, as is


now geared to its existing powers, or will it have more money to enable it to perform its new functions, as set out in the amendment? Those new functions will need money. If new money is not forthcoming, money will be taken from existing functions. People will put pressure on the new quango for social development money, if I may so describe it, in areas outside the present development board areas.
My second question, which was also raised by the hon. Member for Ribble Valley (Mr. Evans), is: what about farming? Farming was not thought of as industrial, and so was probably not considered to be within the original remit of the WDA. Now that the reference is to business, which can be industrial, commercial or professional, it must obviously cover farming, especially when it is said that the business does not need to make a profit—we all know that farmers do not make any profit.
On a legalistic reading of this legalistic document, farming would be included under economic or social development. There are clear social ramifications to farming in rural Wales. I should have thought that farming would fall within the remit of the new social and economic powerhouse, unless the European Community claims that it is the only body allowed to spend money on farmers. If that is not the case, there should be a glimmer of hope for farmers under the new, more powerful super-quango. Will more money be provided for that purpose?

Mr. Livsey: I commend the remarks of the right hon. Member for Llanelli (Mr. Davies). One of the huge problems of the DBRW was that it could not support farming because it did not have the powers under the legislation that set it up. There were many frustrating moments when we were unable to support the agricultural industry with co-operatives for the marketing of lamb and so on during the 1980s. It would be a great advantage if farming as a business could be incorporated into the remit of the agency.
I strongly support the amendment and congratulate the hon. Member for Meirionnydd Nant Conwy (Mr. Llwyd) on tabling it. There must be redress in the rural areas, through the creation of a rural affairs department. I have long advocated an additional Welsh Office Minister responsible solely for the rural areas. The Under-Secretary is responsible for other matters, such as education under the previous Administration, and health under the present Government. Such is the importance of the rural areas that they deserve a strong focus.
I agree with the hon. Member for Clwyd, West (Mr. Thomas), who said that the resources should be ring-fenced. As a consequence of amalgamating the bodies, resources may find their way to the centre. I hope that I am wrong. We have heard an analogy with rugby. It is significant that one of the reasons why the English rugby team is so successful is that a certain proprietor of The Sun has enabled an £85 million deal to be done. It is ironic that the Government gave an £85 million support package to agriculture recently, but that was across the United Kingdom. Only £12 million of that came to Wales, so we are losing out again.
We must demonstrate the needs of rural Wales. Agriculture is vital. In some parts of Wales, 25 per cent. of the population is engaged directly in agriculture or in support industries. Family farms are in crisis. The farm

management survey figures for the year 1997–98 suggest that farmers in Wales will earn only £2.50 an hour on a 40-hour week, and in 1998–99 are unlikely to make anything at all. We have heard reference to sustainability—we need sustainable incomes as well.
I know of many instances where rural businesses have collapsed in mid-Wales.

Mr. Öpik: Does my hon. Friend share my view that there has never been a more important time to get support right? The closure of DC Evans in Newtown and Welshpool has cost 35 jobs, and the closure of the former Laura Ashley factory—now called Merchant Design Manufacturing—in Machynlleth cost 60 jobs. People are looking to the Bill to provide real support, so that a rural crisis is not allowed to turn into a deep and lasting recession.

Mr. Livsey: I know that my hon. Friend has had many problems in his constituency as a result of the crisis to which I have referred.
Social development, which has already been debated, is extremely important. In the context of rural affairs, national parks are similarly important. One of the purposes of a rural affairs department must surely be to hammer out a rural strategy in conjunction with the assembly. That will create something coherent for the rural areas of Wales.
Amendments Nos. 524 to 539 relate to the transfer of powers from the Development Board for Rural Wales to the Welsh Development Agency. The use of the word "transfer" is extremely important as it identifies what will and should happen. As I have said, we have already debated the transfer of powers for social development.
Business Connect for Wales has given an excellent service throughout the DBRW area and it has been a great success, but it requires staff to service it with expertise. A report yesterday referred to the possibility of 60 jobs being lost in the DBRW. If that happens, it will not be possible to service a business connect network throughout rural Wales. That is serious. We must demand answers.
I have two questions for the Minister. How does he intend to maintain the rural premium in funding the new agency to ensure that the Government's stated aim, which is to see effective business development delivered throughout Wales through business connect, is achieved? Secondly, how is the Minister using the funding mechanism of the new agency to ensure that its new divisional structure delivers the quality and extent of service that he says he wants to see, given that there is the possibility of staff reductions? I should say that that possibility was denied yesterday, but I hope that the Minister will refer to it.
The rural premium, because of sparsity, has been £100 per person in the DBRW area. It used to be £605 per person in the WDA area, but that premium has been subsumed. It has found its way into local authorities and has been lost. Will that happen to the rural premium, which has been made available with success, in the DBRW area? Perhaps that puts the question of the ring-fencing of resources back into the park.
The Government should accept the amendments as a form of insurance for rural Wales, for agriculture, for rural businesses and for people living in the rural areas. Present powers must not be lost. Instead, they must be


transferred. If the hon. Member for Meirionnydd Nant Conwy puts the amendment to the vote, we shall support him.

Mr. Caton: I shall speak in favour of the policy for rural areas as set out in the Bill and, therefore, against the amendments. In doing so, I have much sympathy for the fears and concerns of Members who represent constituencies which come within the area of the Development Board for Rural Wales, which is to be merged into the Welsh Development Agency.
I used to live just outside Aberystwyth. That being so, I am aware of the high-quality work that the DBRW has done, including the use of its social powers. Its special expertise in taking up economic problems in our country towns and villages has proved valuable. The Mid-Wales Export Association, which was established and funded by the DBRW, has undertaken superb work recently.
I represent and live in a rural constituency that is not included within the DBRW boundary. Like many of my colleagues in rural south Wales, west Wales and parts of north Wales, I am concerned that the current situation is not sustainable, to borrow a word that was used in a previous debate. We do not have access to the expertise and experience that was once available to us. In the perception of the DBRW, we have in the past been overshadowed, often understandably, perhaps, by the acute problems faced by neighbouring urban and industrial areas.
8.15 pm
The new WDA must make rural development policy one of its key functions, using best practice from both the DBRW and the WDA. We must use the experience and the expertise of both. It must serve the whole of rural Wales, not a particular geographical segment. If we do that, I am sure that the whole will produce rather more than just a sum of the parts.
The agency must have a dedicated rural section, call it a rural affairs department, a rural policy unit or whatever.

Mr. Llwyd: That is precisely what the amendment seeks to achieve.

Mr. Caton: The hon. Gentleman interrupted me just as I was about to say that I do not believe that this is a matter for legislation in the way that is set out in the Bill.
The assembly and the agency should give serious and sympathetic consideration to the proposals of Professor Peter Midmore and Joan Asby of the Welsh Institute of Rural Studies in Aberystwyth, which are that an integrated rural development fund should be established to foster co-operation and indigenous growth, which realistically will be the main source of new jobs and economic activity in most of rural Wales in the coming years.
I can understand that subsumation into an all-Wales Development Agency for some people in mid-Wales represents a threat. I believe that for them, as for the rest of the people of rural Wales, it provides a tremendous opportunity. I hope that we grasp it.

Mr. Ieuan Wyn Jones (Ynys Môon): I am grateful for the opportunity to say a few words in support of my

hon. Friend the Member for Meirionnydd Nant Conwy (Mr. Llwyd), who made an excellent speech in support of the amendment. Having listened to the debate, I think that there is general agreement that there is a need for the Welsh Development Agency to have a rural remit, although there is disagreement about the way in which that is best achieved.
I cannot support any move towards the ring-fencing of cash within an organisation such as the WDA. Although I have supported ring-fencing in the past, I now believe that it can be an extremely rigid way of allocating money. It does not allow flexibility for any agency in any particular way, and that flexibility is important.
I make a particular plea—this has been touched upon by the right hon. Member for Llanelli (Mr. Davies)—for agriculture. He was right to say that it is a vital industry in rural Wales. It is now the biggest employer of any productive industry throughout Wales. In Wales, 53,000 people are employed directly in agriculture. The Development Board for Rural Wales has estimated that, over the next 10 years, 5,000 of those jobs will be clearly under threat.
We are facing a crisis in the rural economy, which is a crisis in rural Wales. Rather than approaching those matters in the disparate way that we have done historically, with some money coming from the common agricultural policy, some through structural funds, some from the Welsh Office and some from local authorities, we should adopt an integrated rural approach. I believe that the new powerhouse agency will have an opportunity to integrate within Wales all of the money that should be coming through into the rural economy. We should consider agriculture as the basis upon which we drive up the rural economy while ensuring that we consider the ancillary industries.
I hope that the Minister will acknowledge the strength of feeling about the need for particular concern to be paid to rural Wales and to drive forward the agenda for an integrated rural policy.

Mr. Hain: I begin by thanking everyone who has contributed to an excellent debate. I acknowledge that there is a real crisis in agriculture and in rural economies generally. I hope that some of my remarks will provide some reassurance. However, there is no point in denying that a crisis exists. The Government are doing their best to tackle it.
I thank the hon. Member for Meirionnydd Nant Conwy (Mr. Llwyd) for the way in which he moved the amendment. In doing so, he made some extremely pointed and inclusive remarks. In asking him and his hon. Friends not to press this group of amendments, I do not for a moment wish in any way to underplay the valuable and much-praised work of the Development Board for Rural Wales over the past two decades. However, much of the rationale for its establishment was a reflection of the need to develop new towns in mid-Wales. That work was completed some time ago, and the board's activities now very much overlap, and, in some cases, duplicate, those of the WDA.
That overlapping and duplication is, in the Government's view, inefficient and is a waste of public money: such waste is one of our key motivations in attempting to reduce the number of non-departmental public bodies in Wales. The legislation as it stands


provides for those functions of the DBRW and the Land Authority for Wales that are not at present enjoyed by the WDA—I stress that point—to transfer to the agency on merger. I am convinced that the skills and experience of the DBRW's staff will provide an invaluable addition to those of the agency, in particular in rural affairs. The transfer of all the board's functions rather than just those not currently enjoyed by the agency would not enhance the agency's powers or functions in any way. That is an important point.
I shall pick up on a point that the hon. Gentleman raised—whether or not I am a Latin scholar—about the issue of "cease to exist". I understand his concerns in that respect, which were echoed by hon. Friends behind me. I shall clarify what the Bill means. In saying that the functions cease to exist, all it is saying is that the DBRW ceases to exist. That is how the Bill achieves that objective. There is, however, a selective transfer of functions that the DBRW exclusively has at present, which the WDA does not have, to the new agency under clauses 121 to 125. That achieves the objective that the hon. Gentleman is seeking.

Mr. Llwyd: The Minister used the word "selective". Does he mean that some powers currently enjoyed by the DBRW will not transfer? Or does he mean that all the powers over and above those that the WDA has, which the DBRW has, will transfer? To what does selective refer?

Mr. Hain: There is an overlap of powers and functions at present, so there is no need to transfer all of them; only those that are not enjoyed by the WDA at present will be transferred.
I now take up the issues raised, quite rightly, by my hon. Friend the Member for Clwyd, West (Mr. Thomas), who made several valid points. I hope that Members of the Assembly will have expertise in agriculture and rural affairs. That is essential. I cannot guarantee it by legislation, but I hope that all the parties will ensure that that is secured.
My hon. Friend also raised a point about the importance of agriculture in the assembly's objectives, and, indeed, those of the WDA. The assembly will be obliged to set out a clear strategy to safeguard—indeed, defend and improve—conditions in rural communities. Section 1(4) of the Welsh Development Agency Act already says:
In exercising their functions the Agency shall have regard to the requirements of agriculture and efficient land management.
That will remain. I think that that answers the point, which was also made by my right hon. Friend the Member for Llanelli (Mr. Davies).
The point was well made by many hon. Members, but in particular by the hon. Member for Brecon and Radnorshire (Mr. Livsey), that rural areas have been facing a crisis. That is why the Government announced today that they will fund the entire start-up costs and first-year running costs of the new British cattle movement service. In addition, the Government have decided that the charges for implementing new specified risk material controls on cattle, sheep and goats will not be recovered from the industry from 1 April. That amounts to the Government giving £70 million to

agriculture. I can assure all hon. Members that a substantial portion of that money will go straight into Wales because of its needs.

Mr. Denzil Davies: As my hon. Friend said, the agency shall now have regard to agriculture, but that is not the same as making it one of its main purposes. Section 1(2)(b) of the Act talks about promoting industrial efficiency. If "industrial" is replaced with "business", which has been defined, surely agriculture must mean promoting agricultural efficiency.

Mr. Hain: I expect that it does. It is valuable that my right hon. Friend has put that on the record. He made the point powerfully.

Mr. Livsey: May I thank the Minister for his announcement about SRM materials and expenditure? It was a helpful statement.

Mr. Hain: I am grateful for that kindly intervention.
Amendment No. 520 relates to the functions of the WDA and its organisational structure. Although I appreciate the concern of the hon. Member for Meirionnydd Nant Conwy, and that of his hon. Friends, I cannot agree that the level of detail is a matter for legislation.
I understand and share the view that the needs of rural areas throughout Wales should be very much part of the focus of the exercise of enlarging the agency's functions that we are undertaking. My right hon. Friend the Secretary of State has already spoken of his wish to see a rural policy unit established within the agency, possibly to be located within one of the regional directorates. It is inconceivable that the rural policy unit—this may be of particular interest to the hon. Member for Montgomeryshire (Mr. Öpik)—could be located in Cardiff. It is a matter for the agency, which is currently reviewing all those issues.
My hon. Friend the Member for Clwyd, West was concerned that there might be a lack of focus for the new agency, and that agriculture may lose out as a result. I can assure him that that should not happen. I hope that all that I have said so far will go towards ensuring that it does not.
There is a problem with ring-fencing. Although my hon. Friend raised the matter, the hon. Member for Ynys Mon (Mr. Jones) replied adequately to it.
It is important that we do not compartmentalise rural policy. One of the advantages of the proposals, as my hon. Friend the Member for Gower (Mr. Caton) said, is that rural policy will assume centre stage in the economic powerhouse. Instead of being confined to one particular but important part of Wales dominated by agriculture, it will be part of the major strategic objectives of the agency as it drives forward its economic strategy, as set by the assembly.
The hon. Member for Ribble Valley (Mr. Evans) asked constructive questions—I must stop praising him, as it will get him pushed off the Front Bench—about regional aid and the definition. Those important points are relevant to Wales's needs, where gross domestic product is, of course, the key factor, and where there is much hidden joblessness. We are pursuing this vigorously with the European Union.
The hon. Gentleman also asked whether the WDA's remit sufficiently covered rural areas. I think that it does, but it will be for the assembly to hold the new agency to account and ensure that it does. I am confident that, with huge representation from rural areas, that will occur. He asked why the Wales tourist board is not coming under the powerhouse agency. I am not sure that that is a matter for this debate. We decided that the tourist board has enormous responsibilities in the coming two years with the summit, the World cup and other initiatives. It will, of course, be for the assembly to decide whether some reorganisation is necessary or desirable in future. We have set clear new targets for investment to spread not just westward but up the valleys and into much of the neglected rural areas.
My right hon. Friend the Member for Llanelli raised important points about money. There will be a budget of £200 million for the new powerhouse agency, bringing together the existing budgets. He raised important points about extending powers and social development functions to all areas. That will have to be taken into account by the assembly. His points will be carefully examined.
All the points raised by the hon. Member for Brecon and Radnorshire will be addressed in the assembly's economic powers. In the light of those comments, I hope that the hon. Member for Meirionnydd Nant Conwy will withdraw the amendment.

Mr. Llwyd: We have had a good and useful debate, although I believe that the Minister is wrong about agriculture. However, his response has been positive and I therefore beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

It being half-past Eight o'clock, THE CHAIRMAN, pursuant to the Order [15 January] and the Resolution [this day], put forthwith the Question necessary for the disposal of the business to be concluded at that hour.

Clause 118 ordered to stand part of the Bill.

Clause 119 ordered to stand part of the Bill.

Schedule 9 agreed to.

Clause 120 ordered to stand part of the Bill.

Schedule 10

WELSH DEVELOPMENT AGENCY: OTHER AMENDMENTS

Question proposed, That this schedule be the Tenth schedule to the Bill.

Mr. Denzil Davies: We have already debated schedule 10 in relation to the definition of the word "business". My hon. Friend the Minister was asked why it was necessary to include
the activities of any government department or any local or other public authority
in the schedule. The Committee will recall that "business" is now defined not only as
activities (whether or not with a view to profit)
but as the
activities of any government department or any local or other public authority".

I do not criticise my hon. Friend for not dealing with the matter, because time ran out. However, I, the hon. Member for Ribble Valley (Mr. Evans) and others asked why on earth a Government Department, perhaps Her Majesty's Treasury—who knows, the public sector borrowing requirement may flip over again; we do not know—should stand outside the WDA with a tin can looking for money. This is a drafting matter. Why is it necessary to include a Government Department? I can understand the need to include a local authority a little better than a Government Department, but why is it necessary to include a public authority?
According to the definition, everyone in the world will now be able to rattle a tin can to obtain money from the WDA. The difficulty is that it has only £200 million. We were told that if it is to satisfy all the requirements built into the legislation, the money will have to come from somewhere else.
I hope that my hon. Friend will be able to say why it is necessary for
any government department or any local or other public authority
to be included in the definition as recipients of money. It may well be that this is a back-door way of legitimatising the joint venture agreements that the WDA had with local authorities. They were clearly illegal right from the beginning. It was not necessary to pay the large sums that some councils did to silks in Wales to tell them that they were illegal.
The WDA then moved to some kind of partnership agreement, although I was never quite clear what the difference between a joint venture and a partnership was. Those agreements are probably illegal as well. I do not know whether this is an attempt to cure that illegality—probably not—but will my hon. Friend explain why it is necessary to have the
activities of any government department or any local or other public authority
included in the definition of "business"?

Mr. Rowlands: I have listened to my hon. Friend the Minister's replies to a succession of amendments and watched the extension of the WDA's role, and I want to enter a caveat. I understand that the economy and the world are changing, but one of the qualities of the WDA was its industrial focus. I can remember the old-fashioned standard industrial classifications. Do I now understand that all that has been swept aside?

Mr. Hain: My hon. Friend the Member for Merthyr Tydfil and Rhymney (Mr. Rowlands) asks a relevant question. We have defined business in a broad way—as we saw in the previous debate, agriculture is included in a certain context—precisely to recognise that, with the development of modern economies, there is a great deal of overlapping between the different areas, which previously may have been segmented off into traditional categories. We wanted to ensure that the new powerhouse drove forward the Welsh economy and that it had sufficient functions and powers to deal coherently with all the different sectors of the Welsh economy.
I reassure my right hon. Friend the Member for Llanelli (Mr. Davies) that there is certainly no intention to introduce any back-door method of legitimising illegal agreements. He is right to suspect that that is not the case. I am sorry that I did not respond to the question earlier,


but I did run out of time. The specific reason why Government Departments or any local or other public authority are included is that it may be necessary, as happens in the case of local authorities, for them to enter into an agreement with a private operator or a joint consortium. I think, for example, of waste management companies. They may then receive WDA support or advice or business services. The same is true for a Government Department. We wanted to ensure that we allowed the new powerhouse to engage in such activity and not be prevented from doing so. That is the purpose of including the reference in the schedule.

Question put and agreed to.

Schedule 10 agreed to.

Clause 121 ordered to stand part of the Bill.

Schedule 11

DEVELOPMENT BOARD FOR RURAL WALES

Mr. Hain: I beg to move amendment No. 490, in page 104, leave out lines 42 to 44.

The First Deputy Chairman of Ways and Means (Mr. Michael J. Martin): With this, it will be convenient to discuss Government amendments Nos. 491 and 492.

Mr. Hain: The Government have tabled the amendments in order to keep alive certain references to the DBRW in the Housing Act 1985 and the Landlord and Tenant Act 1985. I have been advised that to repeal the references might have undesirable knock-on effects on former tenants of the board, or on bodies to which the board may have assigned leases.
For example, without the changes it is possible that former tenants of the DBRW would effectively lose their time as such tenants in calculating their right-to-buy discount. It might also be the case that certain terms of existing tenancies would change simply because the DBRW's functions had been taken over by the WDA.
I hope that hon. Members will agree that those consequences would be undesirable and unfair, and I therefore urge the Committee to accept the amendments.

Amendment agreed to.

Schedule 11, as amended, agreed to.

Clauses 122 to 124 ordered to stand part of the Bill.

Clause 125

ABOLITION ETC.

Mr. Wigley: I beg to move amendment No. 274, in page 59, leave out lines 18 to 20.

The First Deputy Chairman: With this, it will be convenient to discuss the following amendments: No. 275, in clause 131, page 62, leave out lines 8 and 9.
No. 276, in clause 135, page 64, leave out lines 27 to 29.
No. 512, in clause 141, page 66, leave out line 30.

Mr. Wigley: I am grateful for the opportunity, in the brief time that I have available before the witching hour

at 9 o'clock, to deal with this group of amendments. Amendment No. 512 does not belong to us, so I shall leave that to those who claim paternity to it—[Interruption.]—if anyone wants to claim paternity to it. Ours are the type of probing amendments that would be relevant for the Committee stage of any Bill. Had the proceedings been taken in Standing Committee, we would have gone into such detail much more.
Amendment No. 274 seeks to delete lines 18 to 20 to ascertain the exact intention of clause 125, particularly the interplay between subsections (3) and (4). I suspect that that amendment, which deals with the Development Board for Rural Wales, and amendments Nos. 275 and 276, which deal respectively with the Land Authority for Wales and Housing for Wales, are the type of provisions that were heralded in the White Paper. Paragraph 3.23 of the White Paper says:
Where necessary the Bill will give the Assembly limited powers to amend existing primary legislation.
That is what is happening by virtue of those clauses.
I want to ensure that we know the extent of that power to amend. As we heard in a number of our debates this evening, the DBRW has important functions for the parts of Wales for which it is responsible. Those responsibilities might well have been applied in other parts of Wales, as was suggested earlier. The question of amending other legislation because of the effect of the repeal of the Development of Rural Wales Act 1976 is fairly significant. If it is felt that, because of the absence of that Act, there is a need to amend other legislation that impinges on a range of economic and social powers—social powers are within the purview of the 1976 Act—these provisions enable such primary legislation to be amended by order introduced by the Secretary of State to this House.
Subsections (3) and (4) must be taken together in order to understand what we are discussing. I shall select just one part of the wording so that the provision makes sense, because the way in which the draftsmen have attacked this part of the Bill has not resulted in the most attractive English. Subsection (3) says:
The Secretary of State may by order make any consequential … provisions … in connection with … the repeal by this Act of any provision of the Development of Rural Wales Act 1976.
It goes on:
An order under subsection (3) may include provisions … of amendments … of any … other enactment.
Any other enactment could be amended by order if it was deemed to be dealing with any matter that was incidental to or consequential on the abolition of the Development Board for Rural Wales. That is fairly far-reaching, but it is necessary because many aspects will come to light that should have been covered by the legislation. This provision allows a fast route for changes to primary legislation.

Mr. Öpik: Is the right hon. Gentleman trying to ensure that we do not drop the ball when powers are transferred from the Development Board for Rural Wales to the new organisation? Is that correct?

Mr. Wigley: Yes, that is correct, but I am going beyond that. These are probing amendments. I want to know what the effect of leaving out those lines would be,


but first I want to establish what they facilitate. They seem to facilitate the far-reaching changes that may be necessary.
Amendment No. 275 deals with the Land Authority for Wales. Clause 131(3) and (4) give the Secretary of State the power to amend any enactment relating to land that it is felt appropriate to amend according to the wishes and policies of the National Assembly for Wales. Amendment No. 276 deals with Housing for Wales. Clause 135(3) and (4) enable the Secretary of State by order to make any incidental provisions that he deems appropriate.
Those three clauses could have substantial significance, because they allow the Secretary of State to make orders that change whole sections of housing, land or rural affairs legislation. I welcome that. The White Paper included that proposal: the Government said that they would enable primary legislation to be amended by order. The House will not lose its veto over changes to primary legislation, because an order will have to be approved by the House. An order is the vehicle for enabling provisions that would otherwise have to be included in primary legislation to be taken quickly through Parliament, to meet the requirements of the National Assembly for Wales to change the law in those three areas. The proposed mechanism is fast and effective.

Mr. Letwin: Does the right hon. Gentleman agree that the Secretary of State could make the process even faster if, by a transfer of functions order or subsequent such order, he were to transfer the order-making power in those clauses to the assembly?

Mr. Wigley: Yes, that would be a mechanism whereby the assembly could change primary legislation of its own volition without reference to the House of Commons, but the Government are not proposing that. Under the Government's proposals, the House of Commons will ultimately have a veto over such changes to primary legislation. Scotland is allowed to change primary legislation, and we want our assembly to be able to do likewise, but the clauses do not allow that.

Mr. Letwin: Does the right hon. Gentleman agree that the structure is in place to permit that change? Under the Bill, the Secretary of State could, by order, transfer those powers to the assembly so that it could thereafter by order change primary legislation.

Mr. Wigley: Yes, but only for such matters as are covered by the Bill. There is no provision for a general facility along those lines.

Mr. Letwin: indicated dissent.

Mr. Wigley: The hon. Gentleman is shaking his head, but the clauses and amendments that we are discussing deal with the activities of the Development Board for Rural Wales, Housing for Wales and the Land Authority for Wales.

Mr. Letwin: Will the right hon. Gentleman give way?

Mr. Wigley: By all means.

Mr. Letwin: I apologise for intervening again, but the matter that I wish to raise is of some constitutional significance. Clause 22(1) makes it explicit that
Her Majesty may by Order in Council … provide for the transfer to the Assembly of any function so far as exercisable by a Minister of the Crown in relation to Wales".
Clearly, the provisions to which the right hon. Gentleman draws attention are "in relation to Wales". They concern the power
exercisable by a Minister of the Crown".
Therefore, under clause 22, the powers involved could presumably be transferred by a transfer of functions order to the assembly, which would then have the power, by order, to overturn an Act of Parliament.

Mr. Wigley: At the risk of trespassing on our earlier debates—I remember that the subject was touched on, although I think that we got into time trouble—let me say that there are restraints on clause 22.
I was not aware that primary legislation, in its generality, could be amended by order, but if that is the case, and if the arrangement is open-ended, the hon. Gentleman is clearly right. The amendment may be redundant, having already been dealt with by that mechanism. In the case of three of the four areas specified in part VI, however, there are mechanisms to allow changes in primary legislation.
I think that right and proper, and I believe that it should apply to other areas, too. I will not pursue the argument, because I would be trespassing on the Committee's time; but, if responsibilities that lie firmly with the assembly need to be modified, it would be nonsensical not to modify them. The modifications would relate only to Wales, and there is a long stop on the order in this part of the Bill. There are other long stops in other parts with regard to the financial implications. If we do not allow such a development, we shall create a structure that could lead to tensions between the assembly and the House of Commons.
If we want a devolved structure—I realise that Conservative Members may not—we must ensure that it takes on proper responsibility, carries that responsibility and does not merely lead to sniping between one Chamber and another. That is why I welcome the facility provided in the three subsections to which our three amendments relate. I hope, however, that the Minister will tell us how he envisages the working of those subsections, in the context of my comments. I hope that he will justify the need for them, given that—as the hon. Member for West Dorset (Mr. Letwin) pointed out—clause 22 may provide an overarching mechanism that makes those requirements redundant. Some clarification is needed.

Mr. Michael Ancram: I am grateful to my hon. Friend the Member for West Dorset (Mr. Letwin) for succinctly raising one of the major points at issue in the amendments. In our view, it is clearly the beginning of a slippery constitutional slope, which is why the right hon. Member for Caernarfon (Mr. Wigley) was so keen to support the principle behind them. What my hon. Friend warned against, however, is even more evident in clause 141, which our amendment No. 512 addresses.
Clause 141 states:
The Secretary of State may by order make in any enactment contained in … an Act passed before or in the same session as this Act, or … subordinate legislation … such amendments or repeals as appear to him to be appropriate in consequence of this Act.


If my hon. Friend is right, that is also a power that can then be transferred to the assembly under clause 22. In effect, that would allow the assembly—or, indeed, the Secretary of State, which is bad enough—to change primary legislation not on the ground that it was necessary to do so, but on the ground that it appeared to the Secretary of State
to be appropriate in consequence of this Act.
We have discussed Henry VIII clauses before, but this is a Henry VIII clause of which not only Henry VIII but Cardinal Wolsey would have been proud. According to the Delegated Powers and Deregulation Committee's report of 1992–93, a Henry VIII clause is
a provision which enables primary legislation to be amended or repealed by subordinate legislation with or without further Parliamentary scrutiny.
All the authoritative statements on such clauses make it clear that they were not intended to be used in this rather loose and informal way. They are intended to be used restrictively. The report of the Delegated Powers and Deregulation Committee in the other place summed up the definition. It stated:
the case for using Henry VIII clauses for updating lists, or uprating for inflation and for making consequential and transitional provisions was recognised. In any event the Government should be expected to justify the use of such clauses as being necessary: they should not be used simply for convenience.
I think that the Committee will agree that if such a mechanism is to be used, those criteria might apply, but they are not contained in clause 141. The clause states:
such amendments or repeals as appear to him to be appropriate in consequence of this Act.
That is a judgment by the Secretary of State, and there are no criteria by which to judge it. The clause could allow him, by order, to change primary legislation through a one-and-a-half-hour debate without amendment. As my hon. Friend the Member for West Dorset said, if that power were transferred to the Welsh assembly, that body could change primary legislation, whether by amendment or repeal, and Parliament would not have a chance to consider the matter.
That is a dangerous precedent, and I do not think that the Committee should lightly allow it to pass. I hope that even if the Minister cannot accept the amendment, he will bear in mind the seriousness of my statement and will at least agree to look at the issue again.

Mr. Hain: I can reassure the right hon. Members for Devizes (Mr. Ancram) and for Caernarfon (Mr. Wigley) that their concerns are misplaced. The amendments relate to residual order-making provisions in the Bill that allow the Secretary of State, by order, to amend primary legislation as a consequence of the quango reform provisions in part VI or the enactment of the Bill generally. All major Bills have an impact on existing statutes and require repeals and amendments. Although we have tried to provide for those in the Bill as, for example, in schedules 8 and 14, it is possible that some detailed matters have not yet been identified. That is why the safety net powers are necessary.
I understand the concerns of hon. Members who have tabled the amendments and I reassure them that the powers are intended to be used and, I stress, could be used only as a means of tidying up the statute book where other provisions in the Bill make that necessary. The alternative

would be to return with fresh primary legislation to cover minor and technical matters. I hope that all hon. Members will agree that that would not be a fruitful use of parliamentary time.
Amendment No. 512 was tabled in the name of the right hon. Member for Devizes and some of his hon. Friends. I have heard the phrase "slippery slope" so often during the Bill's passage that by now the slope is well oiled. It is pure fantasy. The amendment would remove from clause 141 the Secretary of State's power to amend primary legislation by order when the Bill's other provisions made that necessary or desirable. The power represents a far better approach than burdening Parliament with fresh primary legislation to effect technical amendments.

Mr. Ancram: Will the Minister give way?

Mr. Hain: No, because I do not have much time.
I recognise the right hon. Gentleman's concern, but there is no scope for such a power to be misused. As I have said, it may be used only as a consequence of the Bill's provisions. Clause 144 provides that any orders made under clause 141, which amend primary legislation, would be subject to affirmative resolution here and in the other place.

Mr. Ancram: Will the Minister give way?

Mr. Hain: No, and I regret that I cannot give way. I have not been left much time.
The same arguments apply to the clauses that the right hon. Member for Caernarfon seeks to amend. A Secretary of State who, for whatever reason, sought to use the power unreasonably, could be checked by Parliament, which could also reject a draft order if it considered that the matter would be more properly dealt with by fresh primary legislation.
The amendments tabled by the right hon. Member for Caernarfon would remove the Secretary of State's order-making powers in the merger of the Welsh Development Agency, the Development Board for Rural Wales and the Land Authority for Wales and in the abolition of Tai Cymru, which would seriously impede the smooth implementation of those proposals. If further technical matters were uncovered during the merger process, we should then have to introduce new primary legislation to deal with them. I am sure that the right hon. Gentleman would not wish that to happen, and therefore invite him to withdraw his amendment.

Mr. Wigley: I am very grateful for the Minister's response, and I have taken note of the points made by the right hon. Member for Devizes (Mr. Ancram). The point is that—although different arguments may apply to clause 22—the clause would provide a safeguard for the House and avoid the need for primary legislation each time there was a need for consequential changes arising from the Bill.

It being Nine o'clock, THE CHAIRMAN, pursuant to the Order [15 January] and the Resolution [this day], put forthwith the Question already proposed from the Chair.

Amendment negatived.

THE CHAIRMAN then proceeded to put forthwith the Questions necessary for the disposal of the business to be concluded at that hour.

Clause 125 ordered to stand part of the Bill.

Clauses 126 to 131 ordered to stand part of the Bill.

Clause 132 ordered to stand part of the Bill.

Schedule 12 agreed to.

Clause 133 ordered to stand part of the Bill.

Mr. Letwin: On a point of order, Mr. Martin. I wonder whether you will give some guidance to a new Member on a genuine point of order. Earlier in the Committee's proceedings, the Secretary of State wrote to me—he deposited the letter in the Library—stating that there neither were nor would be powers other than those that I had mentioned for the assembly to overturn primary legislation passed by the House. The Minister—in failing to respond to what was said, and by what he has or has not said—has virtually implied that that letter was false or was inadvertently misleading. I wonder whether you can give us some idea of how one should deal with such a situation in the Committee's proceedings.

The First Deputy Chairman: Perhaps the hon. Gentleman can table questions to the Minister to get some elucidation on what he meant. The hon. Gentleman will understand that we have now passed that matter because of an instruction of the House.

Clauses 134 to 136 ordered to stand part of the Bill.

Schedule 13

AUDIT ETC. OF WELSH PUBLIC BODIES

Mr. Tim Collins: I beg to move amendment No. 510, in page 118, line 20, at end insert—
'12. The Arts Council for Wales.
13. The Sports Council for Wales.'.

The First Deputy Chairman: With this, it will be convenient to discuss amendment No. 511, in page 118, leave out lines 28 to 31.

Mr. Collins: This group of amendments would correct a seemingly rather serious anomaly in schedule 13: the Arts Council of Wales and the Sports Council for Wales are exempted from the provisions of clause 136 on accountability.
Under clause 136, for those bodies which are specified in parts I or II of schedule 13, which do not include the Arts Council of Wales or the Sports Council for Wales, the Secretary of State may by order make provision about the accounts of any such body,
the audit of any such body's accounts, or … reports by any such body on its exercise of its functions.
The clause goes on to specify that this could include the making of provisions relating to
the giving of directions by the Assembly
and
the publication and public inspection of documents.

Given that in his introduction to the White Paper, the Secretary of State said that one of the primary purposes of the Bill—the creation of a national assembly—was to bring
the quangos under control and into the open",
it seems curious that these two particular bodies should be exempted. It is especially curious because annexe B of the White Paper lists all 19 executive bodies reporting solely to the Secretary of State for Wales, but, if one excludes bodies such as the Development Board for Rural Wales which are to be wound up or merged with other bodies, every one of those 19 is to be subject to the full provisions of clause 136, with the exception of the Sports Council for Wales and the Arts Council of Wales.
The Minister is an amiable soul and a likeable fellow, and no doubt has a good reason for the special status of those two bodies, so we shall probe a little to find out what that may be. Does he regard these bodies as autonomous, executive bodies which should not be subject to clause 136? In one of its customarily excellent papers, the House of Commons Library quotes the constitution unit which has, appropriately, classed the Arts Council of Wales and the Sports Council for Wales alongside the Higher Education Funding Council and the Further Education Funding Council as autonomous bodies. However, the funding councils are fully subject to clause 136, so that cannot be the reason.
Is it because heritage and cultural matters should be given special status? That does not quite work either. Under schedule 13, the National Library of Wales and the National Museum of Wales are properly subject to clause 136. Is it because the two bodies have some advisory functions? That does not work either, because the Ancient Monuments Board for Wales and the Historic Buildings Council for Wales are subject to clause 136 and they have advisory functions.
Could the reason be that the Government regard the Arts Council of Wales and the Sports Council for Wales as unimportant? That is a little difficult to reconcile with the figures in the White Paper which show that, in the current financial year, the Arts Council of Wales is to spend something like £14.7 million and the Sports Council for Wales something like £9.1 million. Those figures exclude lottery awards which the two bodies make in Wales. The Arts Council of Wales reports that, in the last full financial year, it made a total of 228 awards, worth more than £14 million of lottery money. The Sports Council for Wales distributed similarly large sums.
I am sure that the Government would not argue that the two bodies were unimportant because I have in my possession a copy of a speech made 12 months ago by the Prime Minister when he was Leader of the Opposition. It was a speech made at the Mansion house to the British Screen Advisory Council. He said:
Art is important for the standing of the nation. When Britain is culturally successful it matters to the rest of the world. It is part of our national pride.
I am sure that the Minister agrees that, if that is true of Britain, it must be true of Wales, so the two bodies are important and must be properly subject to the provisions of clause 136.
Is the reason for the exclusion that the Government believe that cultural matters should be kept out of the political sphere? There are some who hold the view that such things should be kept out of the hands of grubby


politicians of any party. Sadly, if that were the contention now, the Prime Minister demolished it in his speech 12 months ago when he said:
New Labour wants to put the arts on the political agenda",
so there is no question of the arts being kept out of the political sphere. One is left to wonder exactly what has led the Government to give special treatment to the two bodies.
The Minister, who on the whole has conducted himself amiably in these debates, will forgive me if I venture the somewhat partisan thought that the explanation may lie in the fact that the Government are embarrassed about their record on the arts and sport. That is why they do not want these bodies to have to produce reports or allow their documents to be inspected under clause 136. The Government have every reason not to want such reports to be published. Before taking office, the Prime Minister said in that speech of 12 months ago:
Arts organisations have had a huge boon from the Lottery—now we need to build on what has been achieved.
We found out a few months later what "building on" that meant: it meant taking £50 million away from the arts and £50 million away from sport in order to put it in the Government's coffers.
On the other hand, perhaps the Government do not want reports from these bodies because they are rightly embarrassed by their announcement last December of a further reduction in the grant made to them. The Minister may argue that we should not criticise the Government for that, as Labour is only carrying on with the previous Government's spending targets. He will forgive me for reminding him, however, that it was his party, not ours, which inflicted on the airwaves and ears of the nation for several weeks last year that dreadful pop song "Things can only get better". For the arts and sport, things are getting worse, not better.
Another possibility is that the Government may be embarrassed by what these bodies may have to say about January's announcement by the Secretary of State for Education and Employment to the effect that music, art and physical education are to be struck out of the national curriculum. The Times described that as striking
a blow at the heart of British culture",
and closing
the book on culture for millions of children".
The Government have every reason to be worried about what would happen if the Arts Council of Wales and the Sports Council for Wales were encouraged to produce open publications and to be subject to clause 136. That is no reason why we should accept the status quo that the Bill would maintain.
I believe that the amendments will enable the Government to come clean about their pledges to the Welsh and UK arts and sport communities. They will also enable them to deliver their pledges in the White Paper; they were quite clear in that document that they wanted all quangos to be open and accountable. Just in case the Government are worried that the Arts Council might oppose this idea, I want to end by quoting an extract from the Arts Council's website which appeared this very day. It said that the Arts Council believes
that all the Arts Councils"—

in England, Northern Ireland, Scotland and Wales—
are expected to account for their decisions and to explain them to Government, the arts community and the general public.
If the Arts Council is happy, I cannot see why the Government are not. That is why I commend the amendments to the Committee.

Mr. Rowlands: For the life of me, I cannot understand why sports and arts council issues cannot be subjected to the full rigour of democratic accountability. I have been puzzled by that ever since it was decided to exclude these two bodies. I understand that they have special status—charters and so on—but there is surely a powerful case for making these respectable quangos democratically accountable and responsible. They make operational and budgetary decisions of considerable interest to, and consequence for, large numbers of people. Why, then, are they to be excluded?
I do not want to embarrass Ministers by reminding them that before the election, we used very strong language about quangos and the quango state. The arts and sports councils were often invoked as examples of just such bodies. Like all other sensible, right-thinking people, I assumed at the time that they would be made fully accountable to the democratic assembly. Now it appears that they, more than any other organisations, are to be excluded from supervision.
I accept the problems caused by the special way in which those two bodies were set up—they were established by warrant, or whatever—but I believe that those two functions could have become the direct responsibility of the assembly. I did not think that we needed a sports council and an arts council whose budget would need accounting for. I think that they could have become an integral part of the Committee structure of the assembly. Those bodies make interesting, fascinating decisions on priorities in all sorts of ways.

Mr. John Smith: Can my hon. Friend envisage, especially in the light of recent events, a situation in which a Committee of the Welsh assembly selected future national rugby teams?

Mr. Rowlands: My hon. Friend tempts me to say that things could not be worse. Things must get better. What was that lovely song we had for the election—"Things can only get better"? Certainly, after last Saturday, that must be true of Welsh rugby.
May I remind my hon. Friend that there has been lively public debate of all sorts in the Welsh media about arts expenditure. There was a debate, or argument, between the Valley arts association and the arts council. It is a curious belief that democracy will be philistine by nature. I do not believe that that is so.

Mr. Desmond Swayne: Does the hon. Gentleman accept that the amendments will not restrict the ability of the arts council or the sports council to undertake their current activities, but simply make them accountable?

Mr. Rowlands: I am suggesting that the amendments are not radical enough, and that given the nature and character of the organisations concerned and the interest


in the way in which they spend their money and their priorities, there is a case for more direct democratic accountability and responsibility for their actions.
We made that case over and over again in the run-up to the election. I said that if one had to choose two quangos that should be subject to full democratic accountability and responsibility, it would be those two. There were arguments; there were, rightly, lively debates about the various priorities of the Arts Council of Wales.
There is not one of us who is not interested in the way in which the Sports Council for Wales spends and allocates its money. There is interest not only in its grand strategies for young people—many of which are most admirable, according to all the documents that I have read—but in the nitty-gritty decision-making processes by which grants and resources are allocated to various organisations and communities. I would have thought that that was the meat and drink of democratic accountability and of devolution in its real sense. Then we find in schedule 13, after reading through the names of all the other bodies, that right at the bottom, the quangos most exclusively excluded from any form of democratic accountability are the arts council and the sports council.

Mr. Gareth Thomas: Is it not the case that the Government have inherited an anomaly and that they have to live with it? Would it not require a separate regime to put it right?

Mr. Swayne: Change it.

Mr. Thomas: It will be interesting to hear what the Minister says.

Mr. Rowlands: I wish that I had brought some letters with me, because I had something of a correspondence with my right hon. Friend the Secretary of State about the special status of those two bodies. I thought that Parliament was supreme, and that whatever the problems with the status of the two organisations and the methods by which they were established, Parliament could simply unwind the process. Although that would require various consents and various elaborations, surely it would be within the power of Parliament.
I cannot believe that it is beyond the power of Parliament to bring the Sports Council for Wales and the Arts Council of Wales within the jurisdiction, accountability and responsibility of the Welsh assembly. We fight over whole areas of parliamentary sovereignty, but apparently those two bodies are beyond the scope of that sovereignty.
I must confess that I do not understand that, and have never understood it, throughout all the discussions that we have had. We said that we would light a bonfire of the quangos and, although I do not want to burn down either the Sports Council for Wales or the Arts Council of Wales, I certainly want them to become totally democratically responsible to a Welsh assembly.

Mr. Wigley: I am grateful for the opportunity to speak in the debate and grateful to the Conservative

Front-Bench team for having moved the amendment. Tonight, in several debates, we have heard a different tenor of debate from Conservative Members.

Mr. Swayne: That is because of the speech yesterday.

Mr. Wigley: It might well have something to do with that, but, be that as it may, we should welcome the repentance of sinners on the road to Damascus. I congratulate the hon. Member for Westmorland and Lonsdale (Mr. Collins), who spoke lucidly and concisely when moving the amendment. As the hon. Member for Merthyr Tydfil and Rhymney (Mr. Rowlands) said, the amendments is perfectly reasonable.
I have to be careful in what I say, as my wife is on the Arts Council of Wales, although it may well be that that gives me an added incentive to ensure proper scrutiny of that body.

Mr. Rowlands: Abolish your wife.

Mr. Wigley: The hon. Gentleman should not tempt me—his wife has been on the S4C authority and we have already debated the question of whether that body should be answerable.
The Arts Council of Wales and the Sports Council for Wales are important bodies which have a strong Welsh identity—in fact, no quango has a stronger identity than those two. At times, both bodies have decisions to make that should be open to scrutiny. There has been some controversy in recent weeks about certain matters.
The status of those bodies is something with which we could deal in this Parliament, to which point I shall return; but their status has not been such as to prevent Parliament from casting its eye over them in the past. I am sure that the hon. Member for Merthyr Tydfil and Rhymney and the right hon. Member for Llanelli (Mr. Davies) will recall a meeting of the Welsh Grand Committee where we debated the annual report of the Arts Council of Wales. I remember Lord Hooson—Emlyn Hooson as he then was—being involved in that. If the Welsh Grand Committee can exercise some degree of scrutiny over that body and, by implication, over the Sports Council for Wales, why on earth can the assembly not do the same thing?
If the Government have come up against some technical changes which will take a prolonged period to get through, would it not be sensible to provide in this part of the Bill an order-making mechanism that could transfer responsibility for the two bodies fairly quickly, once that procedure has been exhausted? Our debate has demonstrated a meeting of minds across the Committee, and unless there is a very good reason for refusing the amendments, this may be an issue on which the Minister should choose to give way and incorporate the suggestion in the Bill.

Mr. John Hayes: I wish to speak on the amendments, but, before doing so, I should like to thank the right hon. Member for Caernarfon (Mr. Wigley) for his acknowledgement of Conservative pragmatism. It is that mixture of pragmatism and principle which has illuminated the Conservative mind throughout the centuries, and hearing that tribute


from the right hon. Gentleman merely confirms what most of us already knew about the Conservatives' ability to adapt to change.
It is in that spirit that I approach the amendments, because, if we are going to do this, we must do it properly. The message that the exclusion of the arts and sports in Wales will broadcast to those communities and to the whole of Wales is that they are not important. How particularly and peculiarly unfortunate that is, given that we are talking about Wales, which is the land of Dylan Thomas, of Gareth Edwards and of Barry John—I was at the match on Saturday, but we shall not go into that. As my hon. Friend the Member for Westmorland and Lonsdale (Mr. Collins) said—

Mr. David Hanson: Will the hon. Gentleman give way?

Mr. Hayes: I am happy to do so, if the hon. Gentleman wants to talk about rugby.

Mr. Hanson: Is the hon. Gentleman aware that both the bodies named in the amendments were established by royal charter and that the only reason why they are not being brought under the control of the democratic assembly in the Bill is that the arrangements can be changed by invitation via the royal charter procedure? That is the only reason—it is a simple technical matter. We do not disagree with Opposition Members or with my hon. Friend the Member for Merthyr Tydfil and Rhymney (Mr. Rowlands) on the principles of the Bill. This is a simple technical matter which can be dealt with outside legislation.

Mr. Hayes: The problem with that thesis, as my hon. Friend the Member for Westmorland and Lonsdale has pointed out, is that the two bodies are no different in that respect from several others which are treated entirely differently in the Bill.

Mr. Hanson: Will the hon. Gentleman give way?

Mr. Hayes: No, I will not give way again because I wish to be brief and I have been generous to the hon. Gentleman once. The message being broadcast to these communities is that they have been deliberately excluded, and that must be unhealthy. I could go on at length about the Government's cuts to the arts, but I have been moderate, sensible and reasonable. Let us make this work properly by bringing the bodies within the compass of proper procedure. Let us make them accountable and, therefore, in the eyes of the public, respectable.

Mr. Laurence Robertson: I am not sure that I can follow the comments of my hon. Friend the Member for South Holland and The Deepings (Mr. Hayes)—certainly not about rugby. I must endorse what my hon. Friend the Member for Westmorland and Lonsdale (Mr. Collins) has said. I find the drafting of schedule 13 odd for a number of reasons, not least because I have looked at similar legislation dealing with audit.
My understanding is that the Government are looking to extend the scope of auditing. It seems odd to me that the Arts Council of Wales and the Sports Council for

Wales should not be included, given the nature of those august bodies. It would be helpful to those bodies if they were subject to full audit, because their awards are the subject of controversy—not from an audit point of view, but from the point of view of those who do not receive awards. I am sure that many hon. Members are aware of the controversy surrounding the awards. It would be in the interests of those bodies if they fell within the schedule. For that reason, the Minister should look at the schedule from the point of view of those bodies.

Mr. Swayne: I have essentially only one point to make—it is to distance support for the amendments from the case made by the hon. Member for Merthyr Tydfil and Rhymney (Mr. Rowlands). The amendments are purely about financial accountability, and I reject entirely the case made by the hon. Gentleman that this is meat and drink for the democratic process.
It would have been no more appropriate to go further and take those bodies into the heart of the assembly, with Committees dishing out the funds for the arts and sport, than for a Committee of this House to undertake such a function. It is outrageous. [Interruption.] If the hon. Member for West Carmarthen and South Pembrokeshire (Mr. Ainger) wants me to give way, I shall happily do so, but he must not continue mumbling from a sedentary position. I cannot hear what he is saying.
Putting such powers in the hands of politicians would be most dangerous. It is outrageous to suggest that the task could be properly done by politicians, who do not have the expertise for it. As for the suggestion by the hon. Member for Clwyd, West (Mr. Thomas) that this was merely an anomaly that the Government had inherited and with which they had to live, that is extraordinary. For a Government who are turning the constitution on its head to say that this is an anomaly is rather weak. They will have to do better than that.

Mr. Hain: This is starting to be quite fun. What I expected to be an extremely technical debate has opened up into a wide-ranging one.
I congratulate the hon. Member for Westmorland and Lonsdale (Mr. Collins) on a very effective contribution from the Front Bench. If he keeps that up, he will soon be challenging his hon. Friends for positions on the Front Bench. I seem to recall that, in a previous incarnation, he was a chief spin doctor for the Conservative party—indeed, that he might even have operated from Conservative central office. I congratulate him on bringing his talents to the Dispatch Box tonight. I also congratulate him on regarding me as likable and amiable, but I assure him that flattery will get him nowhere in this debate.
I respond directly to the Conservative Members who intervened with great eloquence in the past few minutes—I am sure at very short notice—to make some arguments about the amendments. Obviously, the short notice has encouraged them to overlook a central fact about the debate, about which I am sure that, in retrospect, they will be very embarrassed.
I wonder whether Conservative Members realised, as they went to great lengths to attack the Arts Council of Wales, question its credentials and wonder why the assembly was not abolishing it or taking control of it, that the chief executive of the Arts Council of Wales is


Mr. Emyr Jenkins, the father of Mrs. Hague, the wife of the leader of the Conservative party. In all humility, I think that the hon. Members for South Holland and The Deepings (Mr. Hayes), for Tewkesbury (Mr. Robertson) and for New Forest, West (Mr. Swayne) should have recognised that and perhaps taken his advice.

Mr. Laurence Robertson: rose

Mr. Ancram: rose

Mr. Hain: I shall let the hon. Member for Tewkesbury intervene in a moment.
The chief executive of the Arts Council of Wales would have been able to instruct the hon. Gentlemen on the details of its royal charter and on why the amendments are unnecessary.

Mr. Ancram: rose

Mr. Hain: I know that the right hon. Gentleman is extremely sore about the fact that I ran out of time to give way to him last time, so I shall generously let him in this time.

Mr. Ancram: I am grateful to the Minister for his unusual generosity in giving way in one of his winding-up speeches. His remarks about the father of the wife of the leader of the Conservative party came rather strangely from the Labour party, because I had understood that the Labour party did not believe in nepotism. We do not; does he?

Mr. Hain: I am still trying to follow the relevance of that point, but I encourage the right hon. Gentleman to keep up that type of spirited intervention. I thought that nepotism was the product of the Conservative party over the years. While we are getting rid of the Conservative quango state, any trace of nepotism will be got rid of in this context as well.

Mr. Owen Paterson: rose

Mr. Hain: I think I was due to give way to the hon. Member for Tewkesbury.

Mr. Laurence Robertson: I remind the Minister that I described the arts council as an august body. I was suggesting that the measures contained in the amendments would add weight to those bodies and take nothing from them.

Mr. Hain: I understand the point. I was merely suggesting to the hon. Gentleman that, had he had time to obtain detailed guidance during the few days in which I am sure that he has been preparing his speech, he would have had the chance to consult Mrs. Ffion Hague, who I suspect is an expert, not just on the Arts Council of Wales, but on all of Wales. Given that she occupied a very senior position in the private office of the Welsh Office and, as I understand it, did extremely well and landed up marrying the former Secretary of State, she could have

given the hon. Member for Tewkesbury a great deal of advice, after which he might have concluded that his intervention tonight was a little over-enthusiastic.
I appreciate that these may have been probing amendments; perhaps they were probing speeches as well. [Interruption.] Ah, we are going to get a Division at last, are we? I relish the prospect of a Division. We have been champing at the bit for a Division all evening. It is a measure of the fact that the Conservative party has adopted such a low-key approach to the Bill. Indeed, at times tonight the hon. Member for Ribble Valley (Mr. Evans)—Ribble-on-Wales—actually seemed to praise elements of the Bill. I welcome his conversion. I assure the hon. Gentleman that the Welsh Office—and, I am sure, the Welsh assembly—will carefully consider resurrecting the Mumbles railway.
These probing amendments seek to establish why the Arts Council of Wales and the Sports Council for Wales will apparently be subject only to examinations by the Auditor General for Wales of their use of resources. Some legitimate questions have been raised, and I shall attempt to answer them. The royal charters of the Arts Council of Wales and the Sports Council for Wales make no reference—far be it from me to suggest that this is an anomaly—to audit arrangements. The current position is that, by agreement as set out in their management statements, the Comptroller and Auditor General audits the councils' grant in aid accounts. In other words, there are no auditing provisions in the charters of those two councils. Perhaps the matter was overlooked. That is why, by agreement, those special auditing arrangements are set in train by the Comptroller and Auditor General.
Under section 7 of the National Audit Act 1983, the Comptroller and Auditor General has powers to carry out examinations of the economy, efficiency and effectiveness of the councils' use of resources. Far from ducking the issue, we believe that we should be firmer in the context of this Bill about the auditing arrangements that govern those two important quangos. The Government intend to invite the two councils to propose amendments to their royal charters that would confer on the Auditor General for Wales the function of auditing their grant in aid accounts. Therefore, although the Government agree with the purpose of the amendments, we believe that it is unnecessary to change schedule 13 to achieve the desired outcome. The Government intend that the charters, rather than an order under clause 136, should provide for the audit arrangements.

Mr. Rowlands: I am following the Minister as closely as I can. What if the two bodies concerned refuse to comply?

Mr. Hain: I am sure that Her Majesty would not want to be put in that position. My hon. Friend made some very good points—I suspect at short notice, but he was no less eloquent for that. The Arts Council of Wales and the Sports Council for Wales are bodies created by charter or royal warrant. Therefore, the assembly would not have the power simply to amend their auditing arrangements and it would not be appropriate to do so in the Bill.

Mr. Rowlands: If I may pursue that point, the assembly would not have the power to amend those arrangements, but Parliament does. I drew attention to that fact in correspondence and through interventions in much


earlier debates. I took advice from the Library, and it is clear that Parliament can overrule and change the arrangements. Is it a lack of political will, rather than a complicated technical exercise, that has led us to this impasse?

Mr. Hain: We decided—I am sure that my hon. Friend would have done the same in our position—that this was the best way to approach the issue. It was not a question of a lack of political will; it was a question of convention and the right and proper way to proceed.

Mr. Hanson: I have listened very carefully to the Minister's comments. Does he mean that the Conservatives in opposition have proposed an amendment that transfers powers from Her Majesty the Queen to the Welsh assembly?

Mr. Hain: My hon. Friend raises a very interesting question. I am not sure that that is the Opposition's intention—perhaps it is one consequence of their amendments. We are behaving with extreme decorum and responsibility in this matter, and it is interesting to note that Conservative Members are not doing the same.

Mr. Ancram: This is new Labour. This is modernisation.

Mr. Hain: The right hon. Gentleman chides me for adopting new Labour practices. Apparently the Conservative party is considering changing not only its whole structure but possibly even its name. Plaid Cymru may do the same thing. Perhaps that is a consequence of the new inclusive politics that has been sparked off in the Welsh context.

Mr. Paterson: Can the Minister explain where the decorum and responsibility are in the clause? It is in breach of the statement made by the Secretary of State to the House when he introduced the White Paper. He said:
The Assembly will be given sweeping powers to democratise and if necessary further restructure the quango state."—[Official Report, 25 July 1997; Vol. 298, c. 1124]
He also said:
No longer will our key public services lie in the hands of political appointees operating in secret and accountable to no one in Wales."—[Official Report, 22 July 1997; Vol. 298, c. 755.]
Can the Minister explain the anomaly?

Mr. Hain: There is no anomaly. The Bill is full of decorum and responsibility. As the hon. Gentleman refers to the bonfire of the quangos, I shall try to answer him fully in the time available. You will tell me, Mr. Martin, whether I am in order.
The five bodies that will be abolished spend £164 million. That is almost one fifth of the total sum spent by the bodies. If the assembly abolished all the bodies possible, there would be only 16 bodies left, compared to the 45 that exist now.

Mr. Dominic Grieve: On a point of order, Mr. Martin. What has that to do with the Arts Council of Wales and the Sports Council for Wales?

The First Deputy Chairman: The Minister is in order. If he were out of order, I would have told him so.

Mr. Hain: I am grateful, Mr. Martin, and I will stay in order as best I can. I am sure that you will keep me in order if I stray. With all due humility, I was answering a question that had been put to me.
The assembly has the ability to leave only 16 quangos in existence, if it so chooses. That amounts to a bonfire of the quangos, which we lit with the Bill, and we have complied with our commitments in the White Paper.
Why did we not abolish all the bodies? That brings me directly to the Arts Council of Wales and the Sports Council for Wales. They, together with three other bodies—the National Library of Wales, the National Museum of Wales and the Royal Commission on Ancient and Historical Monuments of Wales—are all bodies created by charter or royal warrant.
Unless the Conservative Opposition have suddenly become a republican Opposition, surely they would agree with me that it is for Her Majesty to agree changes to those bodies. It is not appropriate to amend them by means of a Bill. I am surprised at the blatant irresponsibility of the Conservative Opposition in suggesting that.

Mr. Wigley: If, as the Minister suggests, a voluntary change may be introduced by those bodies and taken through the appropriate channels with the palace, would it be the intention of the Secretary of State to use the provision under subsection (6) to amend schedule 13 to bring the two bodies into the schedule's purview?

Mr. Hain: I do not think that that would be necessary. It will be possible to accomplish the necessary changes as set out in the provisions of the Bill for auditing arrangements and other matters.

Mr. Letwin: May I intrude briefly on this amusing spectacle by asking for genuine clarification? Now that the Minister has admitted that the National Library of Wales, the National Museum of Wales and the Royal Commission on Ancient and Historical Monuments of Wales are also established by warrant or charter, can he explain why they fall not in part RI, but in part I of the schedule? Is it because they already have in their warrants or charters provisions for audit that are different from those relating to other bodies?

Mr. Hain: I am grateful to the hon. Gentleman for raising that sensible and not excessively legalistic point. It is a straightforward and common-sense question. [Interruption.] The Whip says, "For a change." That is uncharitable.
Why does the Bill provide for the other charter bodies—the national library, the national museum—to be audited by the Auditor General for Wales? The answer is that grant is paid to the national library and the national museum under section 9 of the Museums and Galleries Act 1992, which also provides for them to prepare accounts and for those accounts to be audited by the Comptroller and Auditor General. It is therefore possible for an order under clause 138 to transfer those functions to the Auditor General for Wales. They are thus in a different position.

Mr. Rowlands: I am not a republican, but I am a parliamentarian. Will my hon. Friend confirm that Parliament can abolish such a charter?

Mr. Hain: As I understand it—from my point of view, I am straying into uncharted territory constitutionally—


Parliament is sovereign in this country. Therefore, presumably, it could do what my hon. Friend suggests. However, by convention that has not happened to royal charters.

Mr. Letwin: rose

Mr. Hain: Does the hon. Gentleman want to have a go at me again?

Mr. Letwin: First, I thank the Minister for his lucid explanation. I congratulate him on having found an instance—I think uniquely in the Committee's examination of such, and I quote, "legalistic points"—in which the Government and their draftsmen have not made an error that they subsequently need to write to somebody about to correct.

Mr. Hain: Touché. The hon. Gentleman makes his point with his customary elegance and legalistic wit.
As for examinations of the use of resources by the councils are concerned—the Arts Council of Wales and the Sports Council for Wales—the Government propose that the Auditor General for Wales should have equivalent powers to those that are set out in the National Audit Act 1983. Clause 137 and schedule 13 provide for that.
The national lottery accounts of the councils are audited by the Comptroller and Auditor General under section 35 of the National Lottery etc. Act 1993. The Government have no plans to change that. To make the most effective use of auditor resources, the Auditor General for Wales will be able to use staff of the National Audit Office under clause 92, so that, as now, one team of auditors could order both sets of accounts. In the light of that explanation, I invite the hon. Member for Westmorland and Lonsdale to withdraw the amendment.
I wish to respond to some specific points which were raised by the hon. Member for Westmorland and Lonsdale. He said that the Government were somehow embarrassed about sport and the arts. I confess, as a Minister, to being embarrassed about the performance of Wales at Twickenham last Saturday. It was the first time that I had been to Twickenham since I was carried off the pitch in January 1970, in the context of an anti-apartheid demonstration against the all-white South African team. Judging by the performance of Wales, it might not be a good idea if I were to go back too soon to watch them play.
The Government are not embarrassed about their commitment to sport, whether it be rugby, football or anything else. As a new Labour Government, through lottery and other provision we have committed ourselves to ensuring that we make Britain, and in our own context Wales, one of the best sporting nations in the world.
I move on to the arts and the responsibilities of the Arts Council of Wales, and the need to ensure, as the Bill does in the provisions that we are applying, that the accounts are properly audited. It is interesting, given the development of arts in Wales, which the Government are encouraging, that we are seeing a new arts movement emerging in a new Wales. We value our past in terms of opera and other arts as we value present achievements in

opera, orchestra, choral music and male voice choirs, for example. I am the president of half a dozen male voice choirs in my constituency.

The Parliamentary Under-Secretary of State for Wales (Mr. Win Griffiths): Give us a song.

Mr. Hain: I think that that would be even more horrific than my speeches in the Chamber.

Mr. Evans: Impossible.

Mr. Hain: We are seeing a new wave of pop music in Wales. It is partly because of the activities of the Arts Council of Wales in recent years that a new wave of popular music has come through such excellent institutions as the Pontardawe international music festival, which takes place in my constituency. It is supported by the Arts Council of Wales. We have seen that new wave of culture coming through Wales, and we are determined to encourage it. Given the Bill's provisions and much better auditing arrangements, that momentum can continue.

Mr. Rowlands: Does my hon. Friend believe that an elected Welsh assembly would do anything less—indeed, it could possibly do a great deal more—to promote just such festivals as he describes? Is that not a case for greater democratic accountability?

Mr. Hain: Indeed. I am grateful to my hon. Friend for making that point, because, in the context of arts provision and policy, one of the central objectives is that the assembly will enable us to involve all of Wales in influencing the overall policy for the arts and sport rather than having a limited group—under the Conservatives, some might have said an elite in Wales—influence its direction. We will have people from all over the country.
I hope that we shall see in the assembly young people who will support some of the excellent new Welsh pop bands, such as Catatonia, the Manic Street Preachers, Super Furry Animals, and the Stereophonics. Indeed, I was delighted to congratulate the Stereophonics on receiving an award at the Brit awards the other week. I did not have a bucket of water poured over me; they were delighted to see me. They are part of the new wave of music that is putting Wales right at the top of the pop agenda and on the international stage. As my hon. Friend said, the Welsh assembly will give greater strength and recognition to the new wave of pop music, with Wales leading the world not just in a democratic transformation but in the transformation of our popular culture. I am sure that the Bill's provisions will encourage that process. The amendments that the Opposition are tabling so destructively will undermine the whole popular movement for music in Wales.
The hon. Member for Westmorland and Lonsdale made a wide-ranging point, but I need to respond to it. He said that the Government were striking music, arts and sport—all of which are covered by the Sports Council for Wales and the Arts Council of Wales—from the national curriculum.

Mr. Win Griffiths: Never.

Mr. Hain: As my hon. Friend reminds us, that would never be possible under this Government. We are


reviewing the way in which the national curriculum is delivered in the classroom. We are saying that arts, sport and music must continue to be taught in primary and secondary schools. We have always valued the curriculum Cymraeg, the broader provision of education, and that is especially true of music, sport and the arts, where Wales prides itself on being ahead of England in the ability of our schoolchildren to perform in those areas.

Mr. Öpik: I apologise for being absent briefly from the debate.
Is the Minister seeking to help Wales to hit above its weight in the arts and sport, in the same way that Barnsley has scored an historic victory over Manchester United in the FA cup tonight?

Mr. Hain: I am interested in that information, because, as well as being vice-president of Neath rugby club, I am a Chelsea fan. It is nice to hear that result, if the information is correct.
In respect of arts policy and sports policy—in regulating the Sports Council for Wales and the Arts Council of Wales, overseeing their objectives and holding them to account—the assembly will ensure that Wales is put on the international stage. It will allow our sportsmen and women, our artists, pop musicians, male voice choirs, opera stars and the rest to have the backing of a national assembly for the first time, ensuring that their voices are heard across Europe and, indeed, the world.

Mr. Livsey: Does the Minister agree that it is nothing short of a tragedy that, particularly in sport in Wales, we no longer have teachers who are thoroughly involved in getting on with the business of teaching youngsters sport? One of the consequences of that is, perhaps, less than good performances by some of our national teams.

Mr. Hain: I very much agree with the hon. Gentleman. It is important to their development. Proper rugby coaching in schools for those children who want it, boys and girls, would help Welsh rugby. I should like to see much better provision for sport in schools. I am discussing with the Sports Council for Wales and the Cricket Council for Wales how we might take that forward, possibly in co-operation with the private sector, but I hasten to say that that is not a matter for debate this evening.
We seek to lighten the burden on teachers of the over-restrictive and over-centrally directed imposition of the national curriculum, which makes it impossible for teachers to deliver on the core skills of numeracy and literacy in which Wales, as the rest of Britain, has fallen behind in recent years.
We are seeking advice from the Curriculum and Assessment Authority for Wales on how to introduce a new curriculum which will protect traditional subjects, such as the arts, music and sport, but allow an iron focus on the essential core skills of literacy in English and Welsh, and numeracy, without which our children cannot achieve their full potential in school.

Mr. Llew Smith: Does my hon. Friend accept that one of the best things that can happen to schools is for them to be able to build on the kind of services that are provided by peripatetic teachers? The fewer peripatetic teachers there are, the poorer the

standard of music will be. Does my hon. Friend accept that some schools now face difficult decisions because of the lack of cash for peripatetic teachers to ensure that we in Wales can build on what we are best at? Our schools have some of the best youth brass bands and orchestras in the United Kingdom, but they require cash.

Mr. Hain: Peripatetic teachers are vital, whether in respect of brass bands or music generally, or of the arts, but particularly in respect of music. The same principle could be applied to sport and I agree that that needs cash. That is one of the many reasons why the Government have introduced an extra £50 million funding for education to go straight into schools budgets in local education authorities throughout Wales, including in my hon. Friend's constituency.
I have in part responded to a point made by my hon. Friend the Member for Merthyr Tydfil and Rhymney (Mr. Rowlands), but I should just like to add to that before I conclude my remarks—much, I am sure, to the relief of the Committee. My hon. Friend asked why we were not subjecting the Arts Council of Wales and the Sports Council for Wales to the full rigours of accountability. We are doing that. They will be accountable to the National Assembly for Wales under the Bill. That will subject them to accountability by elected representatives from all over Britain.
Under clause 29, we have made it clear that royal charter bodies can only gain functions; they cannot be taken away. For those reasons and all the others which I mentioned this evening, I urge the hon. Member for Westmorland and Lonsdale to withdraw the amendment. I am sure that the arts and sports policies in Wales will be all the better if that is done.

Mr. Collins: We have had an extremely enjoyable debate. I particularly enjoyed the reference from the Minister, who will probably go down in history as the first Minister to have filibustered his own Bill, to the idea that the Conservative amendments would undermine the popular music movement across Wales. I know that the Conservative party is on the verge of once again becoming influential, but the idea that, throughout the Principality, electric guitars are being unplugged and drums thrown down as word of the amendments spreads across the land stretches credulity a little, even as far as the Minister is concerned.
We heard speeches by Labour Back Benchers and from Plaid Cymru, and excellent speeches by my hon. Friends, all of which made the argument. I am delighted that the Minister said that the Government agree with the purpose of the amendments. As he has said that he intends to look at ways of implementing the purpose of the amendments, and despite his evident enthusiasm for a vote, which extended almost to the point of goading, we shall deny him the opportunity of a vote. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Schedule 13 agreed to.

It being Ten o'clock, THE CHAIRMAN, pursuant to the Order [15 January] and the Resolution [this day], put forthwith the Questions necessary for the disposal of the business to be concluded at that hour.

Clauses 137 to 147 ordered to stand part of the Bill.

It being after Ten o'clock, THE CHAIRMAN left the Chair to report progress and ask leave to sit again.

To report progress and ask leave to sit again.—[Mr. Jamieson.]

Committee report progress; to sit again tomorrow.

Postal Services (Liverpool)

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Jamieson.]

Maria Eagle: I am pleased to be able to deal with the issue of postal services in Liverpool at such a timely moment, as the decisions that will affect the quality of that service must shortly be made by the Post Office board under the overall policy direction of the Government.
I pay tribute to the men and women who work for the Post Office. May I narrow down my tribute and pay particular tribute to those who work for the Post Office in Liverpool and in the precincts of this House? I know from personal experience in both places how effectively they work, and that they often work under extreme pressure.
The Royal Mail prides itself on its ability to collect a letter anywhere in Britain and deliver it as quickly as possible anywhere else at a fixed price. If one purchases a first-class stamp, the letter is often delivered by the following day. That outstanding quality of service may be threatened in Liverpool by the Royal Mail's plans to remove the sorting of mail away from the city to Warrington.
That is part of the Royal Mail's £64 million investment programme to enable it to meet global and European challenges to its domestic markets. The investment is a welcome indication of the Government's commitment to ensuring that the Royal Mail in the public sector can compete with the best and face the challenges of the new millennium with cutting-edge technology, and with confidence that it can provide a top-quality service to its customers.
I am no Luddite, but I have a quarrel with one aspect of the strategy announced by the Royal Mail in June 1997, and that is what I wish to highlight in this debate. To do so, I must first outline the plan as it affects Liverpool.
In so far as it relates to the Royal Mail's north-west and north Wales region, the plan involves transferring processing from three mail centres, five outward vouching offices and three centres for bulk mail handling to new mail centres and a new regional distribution centre. The Royal Mail envisages a new Warrington mail centre replacing Crewe and Liverpool mail centres, a new Chester mail centre replacing the current Chester mail centre, five outward vouching offices in the Wirral and north Wales, and a new Crewe regional distribution centre replacing Brunswick Dock, Westhoughton and Lostock bulk handling centres.
However, ever since the announcement of those proposals, there has been a strong feeling in Liverpool that the Royal Mail is wrong to move more than 900 jobs to Warrington if they can be retained in Liverpool. I remind the House that Liverpool has an unemployment claimant count of 9.4 per cent., with male unemployment at 13.7 per cent.—one of the highest rates in the country.
The Government and the European Union recognise the relative deprivation. Liverpool is a European objective 1 area, which is a recognition of the fact that it is one of the poorest regions in Europe. The Government have also acknowledged the economic and social disadvantage that is clear for all to see in the city, and have granted Liverpool the status of an employment zone.
My constituency benefits from Government funding for regeneration through two single regeneration budget partnerships at Speke-Garston and Netherley valley. Many other regeneration initiatives throughout Liverpool are backed with Government money. Only last week, the Government approved an estates renewal challenge fund application for £43.78 million to assist in the regeneration of the public sector housing stock in Speke-Garston.

Mr. Eddie O'Hara: Does my hon. Friend recall that, only two weeks ago, she and I were at Ford's factory in Halewood congratulating the workers on being awarded the contract for Jaguar car production, which carries with it £43 million-worth of Government investment? The factory is located between our constituencies. It is a tragedy that such a good news story for Merseyside has been cancelled out by the Post Office's plans for the sorting office.

Maria Eagle: My hon. Friend must be psychic, because I was just about to make that very point.
The Pinehurst estate in the north of Liverpool has also benefited from the estates renewal challenge funding that was announced last week. As my hon. Friend said, Ford's Halewood plant has received £43 million of assistance from the Department of Trade and Industry, and I should like to commend the Minister on his role in that. Many of my constituents work at Halewood, although the plant is in my hon. Friend's constituency. That assistance will enable Ford's decision to build the baby Jaguar on Merseyside to be realised. The Department has also been actively involved in promoting business on Merseyside in other areas. It puts its money where its mouth is, to the tune of millions of pounds.
The Government have also given £13 million of extra money to repair rundown schools in Liverpool. I could use the whole of my speech to give examples of similar Government initiatives. Liverpudlians applaud the Government's concentrated effort to tackle the legacy of unemployment and poverty that long-term decline and 18 years of Tory destruction have left us.
Why should a major publicly owned concern such as Royal Mail, which should be expected to take its social responsibilities seriously, so blithely counteract the Government's good work and threaten to remove 900 jobs at a stroke? It should not, but I accept that operational decisions such as where to site new mail centres should be made by the Royal Mail and the Post Office board and not by the Minister. His role is to set overall policy guidelines, and I know that he would not be swayed to intervene by the facts that I have mentioned alone, although I have no doubt that he is sympathetic to my point of view. However, it should interest him to know that the business planning, evaluation and comparisons of alternative options on which Royal Mail based its decisions were fundamentally and seriously flawed. He should want to put the matter right.
While the work force and local Members of Parliament have campaigned on this issue, it has emerged that there is indeed a site in Liverpool that is better than the Warrington site chosen by Royal Mail for the new mail centre. It is at Speke-Garston, on the old Northern airfield site, soon to be launched as the Estuary business park in my constituency.

Mrs. Louise Ellman: Does my hon. Friend agree that, as the independent consultants'

report—which has now been published—shows that it is more cost-effective for Royal Mail to stay in Liverpool, it would be extremely serious if it took action that would result in the loss of 900 jobs in the most deprived city in the United Kingdom? That would mean a loss of £16 million a year from the local economy, which would affect the whole community.

Maria Eagle: I could not agree more with that.
As my hon. Friend has said, it is not a matter of conjecture that the decision is strange. Like many of my hon. Friends, I have had the benefit of seeing an analysis by the business consultants PA, carried out on a like-for-like basis and using the same evaluation and modelling techniques as Royal Mail to appraise options. PA has not sought to add factors that would make Speke look better than Warrington; its role has been purely to check the rigour of Royal Mail's own option appraisal. Had Royal Mail done a rigorous job itself, one would have expected PA's analysis to result in the same conclusions as those of Royal Mail.
PA, using the same modelling techniques as Royal Mail, produced a very different result when it analysed the various sites. It disagreed with some of Royal Mail's assumptions about travel times to the rail hub for outward mail, and I must say that I agree with its worries. It does not take 40 minutes to travel from Speke to the rail hub at Warrington, as Royal Mail assumed in its analysis. Moreover, although we are often told that the Warrington site is adjacent to the rail hub, it is actually three miles down a road that is unsuitable for heavy goods vehicles, and is often congested. "Adjacent" is therefore a somewhat misleading description, and certainly a relative term.
Furthermore, PA could not fathom Royal Mail's rationale for sending all the mail to Warrington to be sorted, and then sending it back to Liverpool to be delivered. That clearly would adversely affect transport costs and distribution time targets.
It is no small matter, either: 60 per cent. of the mail to be handled at the new centre—whether it is built at Warrington or at Speke—originates from Liverpool, and half that mail is then returned to Liverpool to be delivered there. Meanwhile, only 27 per cent. of the overall volume originates in Warrington. Speke has 14 per cent. more volume returning to it than it originates. Surely it is important to sort the mail closer to where it is posted and to be delivered, if possible, than to transport it to a site by a rail hub that is not needed and then return it to its original point. I for one fail to see how that can be efficient.
I have referred to a few of the detailed points in the analysis, but, as my hon. Friend the Minister will know, there are many more. Let me summarise the full findings of the PA report.
The report shows that a mail centre in Speke is operationally as viable as a Warrington centre; it shows that land is cheaper in Speke, and that there is room for expansion; it shows that a Speke mail centre is cheaper to operate than a Warrington mail centre; it shows that 60 per cent. of the total mail to be processed at the new centre originates from Liverpool, so mail arrival times must be better in Speke than they are in Warrington; it shows that Speke has 14 per cent. more volume returning to it than


it originates; and it shows that a Warrington mail centre will increase travel and subsistence costs for Royal Mail by £3.6 million over three years.
Using Royal Mail's own modelling techniques and data, PA has shown that the Speke site is £3.7 million less expensive to run—on a non-reoccurring account cost basis—than the Warrington site, and worth £4 million more in net present value terms. The report is a devastatingly effective document, and I commend it to the Minister. It raises serious questions—which I hope he will address tonight—about the quality of the Royal Mail analysis in respect of other decisions, and its use of public money in implementing them.
The PA report was commissioned by the Communication Workers Union nationally, in response to the CWU Merseyside amalgamated branch's request for back-up. I commend that local branch. Those who see Liverpool as a place bypassed by the modern world of industrial partnership and stuck in the past of industrial relations might have predicted that, faced with the threat of 900 job losses, the local branch would have responded by downing tools and walking out. Instead, the branch has conducted itself in a most exemplary manner, and has shown itself to be a fine example of a modern trade union. It has taken its campaign to the people of Liverpool, the Royal Mail, hon. Members and the Government, but it has ensured that its members kept working, and has constructively looked for a viable, alternative plan.
The union backed its judgment by producing a devastatingly effective piece of business planning which the national union commissioned on its behalf. That was done despite the worry about the future which I know that those working at Copperas hill have felt for the past eight months.
The union's forward-looking and positive approach has not stopped there. Until the introduction of new technology, preferably at Speke, the union has agreed to change working arrangements to bring in 30,000 items of mail in the early afternoon to ensure that it can be dispatched to the rail hub at Warrington in time for next-day delivery. However, the local management has not implemented the change, and one wonders why not. The local branch of the union is working closely with management to improve overall performance, and it is currently working with Royal Mail industrial engineers to see how staff can best be utilised. Those are hardly the actions of a militant or obstructive union branch.
The results of the PA analysis justify the union's approach. As the Minister knows, I have been pressing for some time for assurances that the constructive and positive way in which the campaign has been conducted will be rewarded with proper consideration for the Speke option.

The Minister for Welfare Reform (Mr. Frank Field): My hon. Friend may find it helpful if I draw attention to the fact that, although usually in an Adjournment debate only the hon. Member initiating it

and the Minister who will reply are present, there are 10 of us here with an interest in this matter. Royal Mail might like to take that into account.

Maria Eagle: I thank my right hon. Friend for that intervention.

Mr. Field: I am told that I cannot count.

Maria Eagle: My hon. Friend certainly counts. I had not noticed how many of my hon. Friends were behind me, but I notice that not many Opposition Members are here.
I have some questions for the Minister. Is he happy that Royal Mail is assessing the Speke option fairly, fully, and against consistent and rigorous criteria? If necessary, will he intervene to ensure that the Royal Mail decision is soundly based? What does he make of the fact that Royal Mail has been unable properly to assess net present values, and, in view of PA's findings, is he sure that the rest of Royal Mail's analysis is robust enough to be implemented?
As Royal Mail is using public resources for major investment, is the Minister confident that its decisions are based on proper business planning and financial competence? I understand that Royal Mail originally ruled out the Speke site without even visiting it. When does he expect Royal Mail to make a decision in respect of the Speke-Garston option? Is he content that, on the day that the union presented the PA report to Royal Mail, it called for final bids from seven tenderers to build the mail centre at Warrington that it had originally planned? Does that show that Royal Mail has made up its mind, and has no intention of changing its plans?
Although I accept that Royal Mail will not enter into binding contractual arrangements in respect of Warrington before returning to the union, does the Minister think that it is sensible for Royal Mail to expect its tenderers to go to the expense of submitting final bids for a particular site before a decision has been made to build the mail centre there? On the basis of his knowledge and the PA report, does he think that option A, which is to build a mail centre at Speke-Garston, should be followed?
Finally, I invite the Minister to visit the Estuary business park in the near future when his parliamentary business is not quite as exhaustingly pressing as it was on the last occasion. Such a visit will enable him to see for himself the advantages of siting the mail centre there.

The Minister of State, Department of Trade and Industry (Mr. Ian McCartney): I congratulate my hon. Friend the Member for Liverpool, Garston (Maria Eagle) on securing this debate on postal services in Liverpool. I should like to declare an interest. I am married to an Evertonian, and my wife's family all live and work in Liverpool. They are probably more interested in how I respond to the debate than are my hon. Friends. I shall pick carefully through the issues that have been raised, because I am keen to maintain a safe and enjoyable family weekend for the first time in many months.
When I have time to do so, I should be more than happy to visit the constituency of my hon. Friend the Member for Garston. I have already visited her constituency on at least two occasions since becoming a Minister, and I look


forward to visiting it again. As my hon. Friend the Member for Knowsley, South (Mr. O'Hara) said, I was there on the day that the massive new investment at Halewood was announced. I hope that I have time in my reply to give the House details of other investments that have been made and to advise my hon. Friend the Member for Garston of other investments that will be made, with the Government's support, in Merseyside.
My hon. Friend the Member for Garston, the Minister for Welfare Reform, my right hon. Friend the Member for Birkenhead (Mr. Field), and my hon. Friends the Members for Liverpool, Riverside (Mrs. Ellman), for Liverpool, West Derby (Mr. Wareing) and for Liverpool, Wavertree (Jane Kennedy) have discussed those matters with me, and I acknowledge the close interest that they have had in the subject since last June. They have maintained—with the Under-Secretary of State for the Home Department, my hon. Friend the Member for Knowsley, North and Sefton, East (Mr. Howarth), the Parliamentary Secretary, Office of Public Service, my hon. Friend the Member for Liverpool, Walton (Mr. Kilfoyle) and my hon. Friends the Members for Knowsley, South and for St. Helens, North (Mr. Watts), and with Liverpool city council and the Communication Workers Union—their involvement in the matter, and have assiduously raised their concerns with me and my Department.
Before responding to the issues of postal services in Liverpool that have been raised in this debate, it is important that the House should understand the matter's broader context. Postal services at both national and local level—in the form of letters delivered to the door or services provided through the nationwide network of post offices—are an important element, on either a personal or a business level, in everyone's daily life.
It is therefore only natural that plans for change might cause concern. When those plans centre on proposals for major investment in automation and introduction of new technology, there is understandable concern, as in Liverpool, about the loss of local employment, local identity and the quality of service that is so closely tied to local postmen or postwomen.
My Department has had discussions with the Post Office on Royal Mail's proposals because of such concerns. Last summer, I met the CWU and Liverpool Members, to hear their views and to discuss their concerns.
At my insistence, Royal Mail subsequently opened discussions on its strategic investment programme with the CWU, and offered to provide the CWU with data on its preferred north Wales and north-west scheme, and with data on other options that it had considered but had rejected on operational and financial grounds. Royal Mail agreed also not to make irrevocable purchase commitments for new sites, and to consider any alternative proposal made by the union within three months. At the union's request, the Post Office subsequently extended the time limit to four months.
Royal Mail's primary duty is to develop and maintain an efficient and competitive postal system on both a national and a regional level. Its overall investment programme is designed further to improve its standards of service, which are already among the highest in the world. That programme accords also with a policy advocated, for example, by the Communication Workers Union in a

consultative document that it issued last autumn, which calls for a substantial increase in the Post Office's capital investment programme.
Royal Mail's planned £64 million investment in the north Wales and north-west region, which was announced last June, is part of its national programme of progressively developing a network of automated processing centres and distribution centres. Those are equipped with the new technology necessary to handle more speedily and accurately the increasing volumes of mail, to improve the quality of service for customers and to maintain its competitive position in the communications market.
An efficient and modern postal infrastructure is obviously very important in attracting new investment and jobs to the north-west and in maximising the potential of the major regeneration projects that are now under way in the region. Unfortunately, Royal Mail's proposals will lead to a net loss of 400 full-time equivalent jobs in the region—comprising 800 from Liverpool and 300 from the Bolton area—which is offset by about 700 jobs at new automated processing centre and regional distribution centre sites.
Royal Mail envisages that a substantial number of Liverpool staff would transfer jobs if a site were eventually agreed at Warrington.

Mrs. Ellman: Does my hon. Friend accept that, given the economic and social circumstances in Liverpool, it will be very difficult for Liverpool workers to travel to Warrington? This is because there is a far lower than average level of car ownership in Liverpool, many jobs are part-time, and the shift times, particularly for women, mean that it would be extremely difficult for the distances involved to be overcome.

Mr. McCartney: I recognise my hon. Friend's argument. Indeed, it has been put to me many times and was deployed as part of the socio-economic case for the site to be in Speke-Garston instead of Warrington. Over the next few days, many people will no doubt put it again to the Post Office to illustrate what impact the people of Liverpool believe a decision to locate the operation at Warrington will have. I have previously assured my hon. Friend the Member for Garston, and did so again today, that the points she has made in relation to the potential cost of relocation have been delivered with some force to the Post Office.
I said at the outset that there have been recent successes in attracting new jobs to Merseyside. In addition to the new Jaguar X400 line at Halewood, there will be 250 jobs at QVC at Knowsley, and a £40 million investment by Medeva is expected to create 100 new jobs in the important pharmaceutical and drugs industry, which has also received substantial additional investment from Glaxo and Eli Lilley.
The north-west as a whole is now the top UK region for attracting call centres, which is a rapidly growing sector. Of course, a few years ago, Merseyside won additional postal jobs, from my constituency and other parts of the north-west, in the restructuring of Parcelforce operations.
My hon. Friend the Member for Garston has highlighted the substantial level of Government funding being injected into Liverpool in recognition of its


objective 1 and employment zone status. This is part of my work at the Department, and we have made substantial efforts to ensure that our strategy in relation to objective 1 status and the attraction of inward investment has been successful since we came into office. I believe that we will continue to be successful in attracting new investment and job opportunities to Merseyside, including Liverpool.
While the proposals clearly have negative features in employment terms for Liverpool, and also for the Lostock and Westhoughton areas of Bolton, it is important to recognise the scale of Royal Mail's long-term commitment to the north-west and north Wales region, whatever the final decision may be. What is clear is that, without any major investment in automation to maintain Royal Mail's competitive position, regionally and nationally, there would over time be a progressively much greater loss of postal jobs in the region than is currently envisaged.
In agreeing to defer any irrevocable commitments to a Warrington site, and to consider seriously any alternative options put forward, Royal Mail did, however, make it clear to the union that contingency planning for its own preferred option would continue while alternative options were being explored. My hon. Friend asked what was happening in relation to the Warrington site, and that is my response to her.
It was made absolutely clear from the outset to the union and others that while alternatives were being considered, there would be no decision to make binding commitments to the Warrington site, but, at the same time, contingency planning had to continue. That is precisely what has happened.

Maria Eagle: Will the Minister give way?

Mr. McCartney: Not at the moment, as I have only three minutes left to finish my remarks.
I know that Royal Mail has been studying carefully the alternative proposals set out in the report. I am arranging an early meeting with the chief executive of the Post Office to discuss the results of its analysis and studies of the alternative Speke-Garston proposal. Decisions relating to the operational arrangements for the postal businesses are and must remain a responsibility of the Post Office board and management.
My locus in what is essentially a management issue is limited to satisfying myself that, in the case of the north-west and Liverpool operations, the alternative options have been fully and fairly considered and judged on consistent and rigorous criteria on a like-for-like basis. When I have done this, it will then be for the Post Office to reach its final commercial decision, which it will discuss with the CWU as soon as it is in a position to do so. Following that, it will meet Members of Parliament for the area to give them its decision on this potential new investment.

Maria Eagle: Does the Minister consider that inviting final tenders to build a plant is contingency planning?

Mr. McCartney: I cannot be any more specific or open with my hon. Friend than I have been. The Post Office gave the commitments in good faith; I intervened personally to ensure that an alternative proposal was made. Having exerted my influence in that manner, there was no way I would countenance any undermining of the professional viability of the proposal. What has happened is a matter of due process. It has nothing to do with irrevocable decisions that would render that process null and void.
That was not the reason I made the decision. If I had not felt that the process of having a potential alternative was right, I would have been open, frank and honest from the outset, last summer, in saying: "This is the site; go ahead with it." I hope that that assurance is of assistance to my colleagues.
Last summer, the people of Liverpool were worried that the Liverpool postmark was going to be lost. I took representations on that, and I can confirm that Liverpool's postmark will continue in use indefinitely. The Post Office has offered a commitment in that respect.
There has been unhelpful press speculation during the past few days to the effect that Girobank is to announce a complete withdrawal from its operations on Merseyside. That is completely speculative. It would be wrong at this stage to assume that the review will result in job losses. A refurbishing—

The motion having been made after Ten o'clock, and the debate having continued for half an hour, MR. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at twenty-nine minutes to Eleven o'clock.